AUD/USD Weekly Fundamental Analysis August 26-30, 2013 Forecast

Weekly Analysis and Recommendation:

The AUD/USD  tumbled again this week ending at 0.9033. The Australian dollar had fallen as low as 89.32 US cents on Thursday after minutes from a United States Federal Reserve meeting showed that some Fed officials are open to begin winding down the central bank’s stimulus program in September. However, the local currency received a boost from upbeat Chinese manufacturing data that helped bring it back above the 90 US cent threshold.

 

Aussie players are now pricing in a mere 6 percent probability of another rate cut at the September policy meeting (according to data from Credit Suisse). More noteworthy still, a dramatic improvement in the 1-year outlook over recent weeks shows investors to no longer expect any further easing over the next 12 months. The stock of policy-shaping news-flow is relatively light in the coming days, suggesting a meaningfully dovish shift in the markets’ forecast is unlikely. July’s HIA Home Sales and Private Sector Credit figures as well as the second-quarter Capital Expenditure print round out the docket.

The threat of interference from external factors remains acute however. Speculation surrounding the Federal Reserve’s intentions to “taper” the size of its monthly stimulus effort remains a key consideration. Minutes from July’s FOMC meeting seemed to reinforce status-quo expectations of a small $10 billion reduction in September. The spotlight is now on commentary from the Jackson Hole Economic Summit running throughout the weekend, followed by a busy schedule of official commentary throughout the week. FOMC voting members John Williams and James Bullard as well as non-voter Jeffrey Lacker are all on tap.

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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.

Major Economic Events for the week of August 19-23 actual v. forecast for Yen, the Aussie, the Kiwi and USD

Historical: From 2010 to present

Highest: 1.1080 USD on Jul 27, 2011

Average: 0.9898 USD over this period

Lowest: 0.8067 USD May 25, 2010

 

Economic Highlights of the coming week that affect the AUD, JPY, NZD and USD