AUD/USD Fundamental Forecast – May 2, 2016

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Published: Apr 29, 2016, 03:22 UTC

The AUD/USD gained 19 points to trade at 0.7645 as the US dollar continued to decline after lackluster GDP data on Thursday. This morning Australian PPI

AUD/USD Fundamental Forecast – May 2, 2016

The AUD/USD gained 19 points to trade at 0.7645 as the US dollar continued to decline after lackluster GDP data on Thursday. This morning Australian PPI and Private Sector data missed expectations. The Australian Business Review reported that prices Australian companies receive for their goods and services slid in the March quarter, further raising the prospect of a rate cut from the Reserve Bank on Tuesday.

The producer price index fell 0.2 per cent for the March quarter, dragging the annual producer price inflation rate down to 1.2 per cent, from 1.9 per cent in the December quarter.

The quarterly deflation reading in the producer price report was the first such showing since June 2014.

The development follows Wednesday’s weak consumer price data, which revealed the first quarter of deflation in seven years. The consumer price index slipped 0.2 per cent in the three months through March, bringing the annual rate down from 1.7 per cent to 1.3 per cent.

The development opened the door to a rate cut from the Reserve Bank on Tuesday, with the PPI numbers only serving to heighten expectations for a cut.

The release of weaker than expected 1Q GDP saw the Dollar index lose over 1% as hopes for a June rate hike were definitively dashed. Business investment, net exports and inventories all dragged on GDP, while consumption growth was weaker than many had hoped.

FxEmpire provides in-depth analysis for each asset 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, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

Today’s economic releases:

Cur.	Event	Actual	Forecast	Previous
	Japan – Showa Day
NZD	Building Consents (MoM) (Mar)	-9.8%		10.8%
NZD	ANZ Business Confidence (Apr)	6.2		3.2
AUD	PPI (QoQ) (Q1)	-0.2%	0.2%	0.3%
AUD	Private Sector Credit (MoM) (Mar)	0.4%	0.6%	0.6%
EUR	German Retail Sales (MoM) (Mar)		0.3%	-0.4%
EUR	Core CPI (YoY)		0.9%	1.0%
EUR	GDP (QoQ) (Q1)		0.4%	0.3%
EUR	Unemployment Rate (Mar)		10.3%	10.3%
GBP	BoE MPC Member Cunliffe Speaks
USD	Core PCE Price Index (MoM) (Mar)		0.1%	0.1%
USD	Personal Spending (MoM) (Mar)		0.2%	0.1%
CAD	GDP (MoM) (Feb)		-0.1%	0.6%
CAD	RMPI (MoM) (Mar)		3.7%	-2.6%
USD	Chicago PMI (Apr)		53.0	53.6
USD	Michigan Consumer Sentiment (Apr)		90.0	89.7
USD	Baker Hughes U.S. Rig Count			343

Upcoming Economic Events that you should be monitoring:

Monday, May 2, 2016

Cur.	Event	Actual	Forecast	Previous
	China – Labor Day
	United Kingdom – Early May Bank Holiday
AUD	HIA New Home Sales (MoM) (Mar)			-5.3%
CNY	Caixin Manufacturing PMI (Apr)			49.7
EUR	German Manufacturing PMI (Apr)		51.9	51.9
EUR	Manufacturing PMI (Apr)		51.5	51.5
USD	Manufacturing PMI (Apr)			50.8
USD	ISM Manufacturing Employment			48.1
USD	ISM Manufacturing PMI (Apr)		51.5	51.8