Analysis and Recommendation: The AUD/USD added 8 pips in the morning session to trade at 0.8864 its highest price in several weeks. The US dollar traded
Analysis and Recommendation:
The AUD/USD added 8 pips in the morning session to trade at 0.8864 its highest price in several weeks. The US dollar traded flat but positive sentiment seemed to surface in the markets as US equities traded higher and consumer confidence soared. New orders for US manufactured durable goods dropped 1.3 per cent in September on the back of a decline in volatile transportation orders, government data showed. National Australia Bank senior economist David de Garis said the data sparked a sell-off in the US dollar. “Reasons to sell the US dollar came from a weaker-than-expected reading from the September US durable goods orders report.
A lower exchange rate helps to make Australian exports cheaper and increases the competitiveness of locally-made goods with imported products. Commonwealth Bank economist Diana Mousina said the Australian dollar’s 10 per cent fall alone would boost economic growth up to one per cent over the next two years. “Businesses with a high export propensity or high import penetration will benefit the most,” she said. “The main winners from a lower currency, from an income sense, will be company profits and government tax revenues.” It is also one of the reasons why the CBA recently moved its forecast for a Reserve Bank interest rate hike from February to August.
The Australian dollar’s recent fall was mainly due to the US dollar getting a boost from an improving American economy and that the US Federal Reserve was considering its first interest rate hike in nine years.
Further indications on the timing of the Fed’s rate rise are expected when the central bank’s boss Janet Yellen holds a press conference early tomorrow, Australian time, after its regular policy meeting.
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 |
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JPY |
Industrial Production |
2.7% |
2.2% |
-1.9% |
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NZD |
Business Confidence |
26.5% |
|
13.4% |
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CAD |
RMPI (MoM) (Sep) |
|
-1.0% |
-2.2% |
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USD |
FOMC Statement |
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USD |
Fed Funds Target Rate |
|
0.25% |
0.25% |
Upcoming Economic Events that you should be monitoring:
Cur. |
Event |
Actual |
Forecast |
Previous |
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NZD |
RBNZ Rate Statement |
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AUD |
HIA New Home Sales |
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|
3.3% |
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GBP |
Nationwide HPI (MoM) |
|
0.3% |
-0.2% |
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GBP |
MPC Member Cunliffe |
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EUR |
Spanish GDP (QoQ) |
|
0.5% |
0.6% |
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|
EUR |
German Unemployment |
|
5K |
13K |
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EUR |
German Unemployment |
|
6.7% |
6.7% |
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|
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USD |
GDP (QoQ) (Q3) |
|
3.0% |
4.6% |
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|
USD |
GDP Price Index (QoQ) |
|
2.0% |
2.1% |
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USD |
Initial Jobless Claims |
|
283K |
283K |
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USD |
Fed Chair Yellen |
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EUR |
German CPI (MoM) |
|
-0.1% |
0.0% |
Government Bond Auction
Date Time Country Auction
Oct 29 10:03 Sweden Sek 3.5bn 5.0% Dec 2020 bonds
Oct 29 10:30 Germany Eur 4.0bn Aug 2024 Bund auction
Oct 29 15:30 US Usd 15bn 2Y FRNs
Oct 29 17:00 US Usd 35bn 5Y Notes
Oct 30 10:10 Italy BTP/CCTeu auctions
Oct 30 17:00 US Usd 29bn 7Y Notes
Nov 03 10:00 Norway T-bill auction
Nov 04 10:15 Austria RAGB auction
Nov 04 10:30 Belgium 3 & 6M T-bill auction (Feb & Apr 2015)
Nov 04 10:30 UK Auctions 0.5% 2050 I/L Gilt
Nov 05 10:30 Germany Eur 4.0bn Oct 2019 Bobl auction
Nov 06 09:30 Spain Bono/Obligacion auction
Nov 06 10:03 Sweden I/L bond auction
Nov 06 11:00 Norway Announces details of bond auction on Nov 11
Nov 07 16:30 Italy Announces details of BOT auction on Nov 12