AUD/USD Fundamental Analysis October 9, 2014 Forecast

Analysis and Recommendation:

The AUD/USD tumbled 26 points to reach 0.8788 as the US dollar regained momentum. The Reserve Bank said, after its board meeting on Tuesday, that it still considered the Australian dollar to be too high despite falling six per cent in September and maintained its stance that its interest rate will remain on hold for some time to come.  A lower dollar could mean fewer jobs, if the position of job site Seek at number seven is any guide. Carsales.com.au is also on the list, at number 28. As the US dollar goes up, demand for gold tends to go down, which explains why gold miner Evolution Mining is at number 19. The presence of Bank of Queensland, AMP and ANZ indicate the impact of the falling dollar on capital markets.

Chinese HSBC services PMI reported below forecast weighing on the local currencies.

The International Monetary Fund expects Australia will have the worst jobless rate in the Asia-Pacific region bar the Philippines, over the next two years. The IMF is predicting a rate of 6.2 per cent in 2014 and 6.1 per cent for 2015. Australia’s labour force numbers have been volatile in recent months with the unemployment rate swinging between a 12-year high of 6.4 per cent and 6.1 per cent. Economists expect Thursday’s jobs figure for September will show an unemployment rate of 6.2 per cent.

More broadly, the IMF has made a modest upgrade to Australia’s growth forecasts in its latest World Economic Outlook, released in Washington on Tuesday, compared with those made in April.

The IMF expects Australia to grow by 2.8 per cent in 2014 and 2.9 per cent in 2015, but still below its long-term average of about 3.25 per cent and a level needed to help lift employment.

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:

 

Upcoming Economic Events that you should be monitoring:

Government Bond Auction

Date Time Country Auction

Oct 08 09:30 Germany Eur 4.0bn Oct 2019 Bobl auction

Oct 08 09:30 Swiss Bond auction (for decision)

Oct 08 15:30 Italy Announces details of BTP

Oct 08 17:00 US 10Y Note auction

Oct 09 09:03 Sweden I/L bond auction

Oct 09 17:00 US 30Y bond auction

Oct 10 09:10 Italy BOT auction