Australian Dollar Faces Hostile Backdrop, May Well Struggle

Australian Dollar Faces Hostile Backdrop, May Well Struggle

Fundamental Australian Dollar Forecast: Bearish

  • The Australian Dollar wilted final week
  • Some weaker information and explanation from a possess executive bank did a damage
  • This week offers small range for a trend change

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Last week was not a ensign duration for Australian Dollar bulls.

Yes, a Reserve Bank of Australia left seductiveness rates alone during their 1.50% record low, as had been zodiacally expected. But a concomitant matter did not demeanour like that of a executive bank in any precipitate to take any monetary-tightening action. It also enclosed another mark of worrying aloud during a damaging effects of a too-strong currency.

Then came some ominous mercantile information in a form of a surprising slide in Aug sell sales. As distant as banking trade went this more than eclipsed some most perkier trade numbers expelled during a same time. Finally, there was RBA house member Ian Harper. He told The Wall Street Journal that serve interest-rate cuts could not be ruled out should expenditure levels uncover signs of vanishing out.

Now of march we competence consider that Mr. Harper was being a small wily here. No executive landowner ever manners out process moves unless it contingency and one square of diseased information need not augur expenditure Armageddon. Moreover, other RBA officials including a administrator have suggested that stream marketplace pricing looks broadly correct. It predicts that a subsequent pierce will in fact be a rise, if not until good into 2018.

However, taken with all of a above, and opposite a backdrop in that markets still consider US financial process is removing tighter, afterwards a Australian Dollar stays underneath a bit of pressure. And there’s small in terms of scheduled mercantile news this week that seems expected to change a dial on this decisively in possibly direction.

Australian business and consumer certainty surveys are entrance up, as are US sell sales and a mins of a final Federal Reserve financial conclave. However, these all seem expected to offer AUD/USD no some-more than duration remit from a backdrop that is not gainful to a bulls.

So it’s a bearish call again this week, even if there’s no apparent reason for a stream downward trend to accelerate markedly. It competence also be value gripping a continue eye out for RBA commentary. It seems that that does a Australian Dollar really small good right now.

Australian Dollar Faces Hostile Backdrop, May Well Struggle

— Written by David Cottle, DailyFX Research

Contact and follow David on Twitter:@DavidCottleFX

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