AUD/USD Fundamental Analysis October 3, 2014 Forecast

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Updated: Aug 24, 2015, 22:00 UTC

Analysis and Recommendation: The AUD/USD gained 56 points to trade at 0.8789 as the commodity currencies recovered after the end of the month declines.

AUD/USD Fundamental Analysis October 3, 2014 Forecast

Analysis and Recommendation:

The AUD/USD gained 56 points to trade at 0.8789 as the commodity currencies recovered after the end of the month declines. Building permits printed above expectations showing a recovery in the housing market. The fall yesterday came after retail spending in August rose just 0.1 per cent, worse than the 0.4 per cent rise the market was expecting. BK Asset Management managing director Boris Schlossberg said the data disappointed the market but buyers started moving in after the currency got near its 2014 low of 86.60 US cents.

Data showed the number of buildings approved rose a seasonally adjusted 3 per cent to 16,810 in the month. That compares with 16,318 approvals in July, seasonally adjusted. Economists surveyed by Bloomberg had expected a 1 per cent rise in building approvals during the month.

Fair value on the Aussie dollar is somewhere between US74¢ to US75¢, but given the push and pull of diverging global interest rates and the slowdown in China it is very difficult to pick when it will get there.

Australia’s currency had been artificially elevated for a number of years as the US Federal Reserve’s quantitative easing program has been flooding global markets with liquidity. Those central bank asset purchases have been tapered since late 2013 and are expected to conclude this month.

With expectations rising the US will start to lift interest rates in mid-2015, the Australian dollar lost more than 7 per cent over September.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Today’s economic releases actual vs. forecast:

Cur.	Event	Actual	Forecast	Previous
AUD	Building Approvals (MoM)	3.0%	1.0%	2.1%
AUD	Trade Balance (Aug)	-0.787B	-0.700B	-1.075B

Remember the ECB Press Conference on Thursday evening

Upcoming Economic Events that you should be monitoring:

Cur.	Event	Actual	Forecast	Previous
GBP	Services PMI (Sep)		59.1	60.5
USD	Nonfarm Payrolls (Sep)		215K	142K
USD	Unemployment Rate		6.1%	6.1%
USD	ISM Non-Mfg. PMI		58.5	59.6