Australian one dollar coins
A handful of Australian one dollar coins is shown in Sydney, February 18, 2004. Reuters/Tim Wimborne

Bell FX Currency Outlook: The Australian dollar has opened the week’s trading just above the .7100 mark as world equity markets recovered on Friday and crude oil bounced after the big selloffs last week.

Australia: The AUD traded in a modest band last week as financial markets experienced a high degree of volatility. With Chinese financial markets resuming today after the week long lunar new year holiday all eyes will be on the fixing of the yuan. Around midday today we should also see the latest trade balance figures from China along with import and export price data. On the weekend in an interview PBoC Governor Zhou
Xiaochuan said there was no basis for the continued depreciation of the yuan since the balance of payments was good and capital outflows were normal. Most analysts expect the Chinese share markets to dip after their
week long hiatus. In Australia we will see the latest auto sale figures. On Tuesday the latest RBA minutes will be released and on Thursday the latest job figures will be revealed for our local economy. No change is expected in our local unemployment rate of 5.8%. We expect the AUD to trade in a relatively narrow band in the next few days in the low .7000’s.

Majors: The latest retail sales figures from the US on Friday were better than expected rising 0.6% in January for the control group when only a rise of 0.3% was expected. The preliminary consumer sentiment survey for this month from the University of Michigan came in a little lower than expected at 90.7 which is lower than last month’s reading of 92.0. GDP in the Eurozone for Q4 came in as expected growing by 0.3% qoq and rising by 1.50% yoy. Germany’s latest CPI figures came in as expected falling 0.8% in January mom but rising by 0.5% yoy. Today we will see the latest GDP figures for Q4 from Japan and expectations are for a fall of 0.2% after a rise of 0.3% in Q3. Although the BOJ is on a path of negative interest rates the JPY has seen a strong rise recently as funds have flowed into the JPY as a safe haven in reaction to the recent volatility in all financial markets. The US share and bond markets will be closed today due to the Presidents Day holiday.

Economic Calendar 15 FEB

  • AU New Motor Vehicle Sales Jan
  • CH Trade Balance Jan
  • EC Trade Balance Dec
  • US Markets Closed Presidents’ Day

Bell Fx

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