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AUD/USD Fundamental Analysis, May 11, 2015 – Forecast

Analysis and Recommendation (AUD/USD Forecast):

The AUD/USD dipped 25 points to trade at 0.7882. Worries about growth and the Chinese economy continue to weigh on the Aussie.  With exports to China making up a huge part of Australia and New Zealand’s sector, both AUD and NZD reacted negatively as a result with AUD/USD gapping from .7666 to .7605 and going on to trade to a low of .7569 (where it currently trades). NZD/USD went the same way, falling from .7536 to .7475 and then going on to trade to a low of .7442, where it opens this morning’s session. There’s plenty of other top tier economic data due from China this week too that might have a similar impact, including GDP and industrial production

There were 3 primary sources of AUD strength last week and they were namely the strong retail sales, Reserve Bank of Australia decision to hold rates and finally the growth in home loans which made it less likely that the RBA will cut rates further in the near term. The latest retail sales report by the Australian Bureau of Statistics showed strong growth in retail sales for 4 consecutive months.

The RBA announced its monetary decision to hold its overnight Cash Rates at 2.25% which surprised the market. The RBA adopted a wait and see approach as it expects the economy to improve further as it expects moderate growth in the global economy. It expected China’s growth to weaken a little which is in line with the signals which China has been giving the world. The RBA also mentioned its unease with the ever expanding real estate market especially in Sydney at a time where the Australian economy is slowing.

ForexTraq 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
  CNY Trade Balance (Apr) 34.13B 39.45B 3.08B
  USD Nonfarm Payrolls (Apr) 224K 126K
  USD Unemployment Rate (Apr) 5.4% 5.5%

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Upcoming Economic Events that you should be monitoring:

Monday, May 11, 2015

Cur. Event Actual Forecast Previous
Russia – Victory Day
  AUD NAB Business Confidence (Apr) 3
  GBP BoE QE Total (May) 375B
  GBP Interest Rate Decision (May) 0.50% 0.50%

Government Bond Auctions

Date Time Country

May 12 09:15 Norway Holds bond auction

May 13 09:10 Italy Auctions BTPs/CCTeus

May 13 09:30 Germany Eur 3bn Feb 2025 Bund

May 13 14:30 Sweden Details bond auction on 20 May

May 14 09:30 UK Auctions 2% 2020 Conventional Gilt

 

AUD/USD Exchange Rate

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