Australian Dollar Outlook - May 18, 2015
Bell FX Currency Outlook: The Australian Dollar has opened this week of trading above the .8000 level as USD data released on Friday night was weaker than expected.
Australia: The AUD has weakened off from its recent highs of last week but still remains above the .8000 mark as the USD continued its weaker tone versus the EUR. There is a real lack of new data to be released locally this week with the highlight the release tomorrow of this month’s RBA board minutes along with the latest consumer confidence figures. This morning RBA Assistant Governor Philip Lowe will be speaking and and his comments will be keenly followed. Later in the week there are two other speeches by other RBA board members. With the AUD back above the .8000 level we would expect there will be many comments that the exchange rate remains too high and should trade to lower levels in line with the currency’s decline in the recent terms of trade.
Majors: In the US on Friday the Empire manufacturing survey revealed a reading of 3.1 versus the 5 figure expected although there was a good recovery from the rogue -1.2 level from last month. Industrial production for April fell 0.3% which was lower than expected but at the same level as that in March. The University of Michigan consumer confidence figure fell unexpectedly to 88.6 from last month’s level of 95.9. This figure is the lowest since Ocotber, 2014. With weaker numbers coming out of the US the chances of a June rate rise have virtually disappeared with 73% of analysts now predicting a September rise. There are a number of banks that have now predicted a rate increase in December but this is still a minority view. In the UK, construction output for March rose 3.9% mom which was in line with predictions and the yoy figure rose 1.6% which was higher than the 1.1% increase anticipated.
Economic Calendar 18 MAY
- AU RBA’s Lowe Give Speech in Sydney
- AU New Motor Vehicle Sales MoM Apr
- US Fed’s Evans Speaks On Economy and Monetary Policy in Stockholm
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