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AUD/USD Weekly Fundamental Analysis, May 11 – 15, 2015 – Forecast

Weekly Analysis and Recommendation (AUD/USD Forecast 2015 May):

The AUD/USD gained 23 points to close the week at 0.7930 after breaking the 80 range after the RBA reduced interest rates to 2.0%.  The Australian dollar has moved slightly higher in offshore trade despite the release of US labour force data that showed the unemployment rate again ticking down. The US jobless rate fell to 5.4 per cent in April, from 5.5 per cent the month prior, according to official Labor Department data.

The drop in the unemployment rate came on the back of a lift in non-farm payrolls of 223,000 for the month. The performance was much improved on the March data; though fell just shy of market expectations.

Still, it had little overall impact on currency markets as it was seen as robust enough to suggest momentum returning to the world’s largest economy, but not quite strong enough to push the Federal Reserve to raise interest rates next month.

The Australian Dollar looks poised to continue the recovery launched in early April as markets adjust to a newly forgiving monetary policy outlook. The currency shot higher in the wake of last week’s monetary policy announcement despite a widely anticipated 25bps interest rate cut as an upbeat statement accompanying the announcement lowered the probability of further easing on the horizon.

RBA Governor Glenn Stevens and company specifically cited “improved trends in household demand over the past six months and stronger growth in employment”. The decision to cut was chalked up to the forgiving inflation outlook, which the central bank said “provided the opportunity…to reinforce recent encouraging trends”. The Aussie rose alongside front-end bond yields, speaking to the announcement’s supportive impact on policy bets.

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

AUDUSD(60 minutes)20150509053458

Major Economic Events for the week that you should be monitoring:

MONDAY, MAY 11

UK

GBP

BoE Asset Purchase Facility

£375

£375

UK

GBP

BoE Interest Rate Decision

0.5%

0.5%

TUESDAY, MAY 12

UK

GBP

NIESR GDP Estimate (3M) (Apr)

0.6%

WEDNESDAY, MAY 13

DE

EUR

Gross Domestic Product (QoQ) (Q1)

0.7%

EMU

EUR

Gross Domestic Product (YoY) (Q1)

0.9%

UK

GBP

BOE’s Governor Carney speech

UK

GBP

Bank of England Quarterly Inflation Report

EMU

EUR

ECB Monetary Policy Meeting Accounts

US

USD

Retail Sales ex Autos (MoM) (Apr)

0.4%

US

USD

Retail Sales (MoM) (Apr)

0.9%

FRIDAY, MAY 15

JP

JPY

Bank of Japan Governor Kuroda Speech

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

 

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