Australian Dollar Outlook - Nov. 23, 2015
Bell FX Currency Outlook: The Australian Dollar finished the week with another strong session, up above 0.7200.
Australia: The AUD finished Friday night 0.6% stronger, having touched a high of 0.7250 and currently trading around 0.7230. This strength is despite another drop in iron ore prices, which was down 1.2% to $44.8, having shed 2% for the week to stand only a hair’s breadth above the July rout low ($44.6). Metals fared poorly across the board, with gold off by 0.4% and the London Metals Exchange Index down by 0.8% to a fresh 7-year low. AUD’s gains appear driven by technical as well as market
positioning. Friday’s moves took AUD/USD above strong resistance levels, including the 100-day moving average, and the down-trend that has prevailed since September 2014. In Australia this week, RBA Governor Stevens’ speech to the Australia Business Economists’ conference on Tuesday will be a highlight, as will the closely-watched private capex report for Q3 on Thursday.
Majors: The EUR underperformed on Friday night as ECB President Draghi said that policymakers would “do what we must to raise inflation as quickly as possible,” in a keynote speech delivered to a banking conference. In contrast, St Louis Fed President Bullard, when commenting on the US labour market, noted that it had “largely normalised” and jobs growth of 130k per month was sufficient to absorb population growth. He believes that a stabilisation in oil prices would push inflation back to 2% (and potentially above it). The comments were consistent with market expectations that the ECB will ramp up its stimulus efforts and the Fed will deliver its first interest rate hike in close to a decade next month. The EUR was down 0.8% against the USD on Friday, close to the 7-month low reached earlier in the week. It looks to be a quiet start to the week with, with European and US PMI data and US home sales the only data releases tonight.
Economic Calendar 23 NOV
- US Existing Home Sales Oct
- US Markit US Manufacturing PMI Nov
- US Chicago Fed Nat Activity Index Oct
[Kick off your trading day with our newsletter]
More from IBT Markets:
Follow us on Facebook
Follow us on Twitter
Subscribe to get this delivered to your inbox daily