Australian Dollar Outlook - 22 April 2013
Bell FX Currency Outlook: The Australian Dollar had a quiet night on Friday after the volatile movements of last
week and opens this morning below 1.0300.
Australia: We had another quiet day of trading on Friday after the huge downward moves in a number of commodities last week. With very few economic data releases on Friday, all financial markets were subdued although all the major European and US equity indices posted gains on Friday although they were down on the week.
This week will be short on announcements as well with the two most important ones being our Q1 CPI data on Wednesday where the market is expecting no surprises with a result comfortably within the 2-3% pa band.
Most analysts expect a reading of 0.7% for the quarter and an annual rate of 2.8% for the past year. Mid-week we will see some HSBC flash manufacturing data for April from China that could if the reading comes in less than expected move the AUD lower.
The market expects to see a reading around the 51.5 level which indicates expansion. If it is significantly different than March's 51.6 reading the AUD could test the 1.0200 level.
Majors: The G-20 meeting over the weekend did not criticise Japan's recent aggressive monetary policies designed to weaken the currency.
The Japanese Finance Minister said they were trying to achieve "price stability and economic recovery".
The USDJPY continues to hover just below the 100 mark this morning. It looks like the ratings agency Fitch will join Moody's in lowering the UK's sovereign debt rating from AAA to AA+ which weakened the GBP.
In Italy, the 85-year-old President Giorgio Napolitano was re-elected by the Italian Parliament to another seven year term as preparations begin for another general election in two months since negotiations between the various political parties in Italy have still not yielded a new leader.
Home sales data from the US tonight and tomorrow night will provide further clues to the strength of the US housing recovery while PMI data from the European Union on Tuesday will give the market a feel for how the region is doing.
Economic Calendar
22 APR US Fed's Dudley (VM) speaks at Transatlantic Conference
US Chicago Fed Activity Index Mar
EU Euro Zone Consumer Confidecne Apr
US Existing Home Sales Mar