Australian Dollar Outlook - Jan. 19, 2016

By @chelean on
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 wild start to 2016 continues with equities lower, commodities lower, commodity currencies lower and yields all lower.

Australia: Ongoing negative terms of trade pressures and higher market volatility levels associated with the very poor start to the year for equities, have been pressing down on the Australian dollar which has fallen by
around 5% so far in 2016. Overnight, it was very quiet due to the US out for Martin Luther King holiday. AUD remains trapped near its lows. While today’s domestic consumer confidence report will be of interest given the recent whirling in financial markets, the China data will be the key driver of market sentiment, along with crude oil prices. Any disappointment will likely see a resumption in AUD weakness. Global growth anxieties and oversupply concerns have underpinned further declines in crude oil prices.

Majors: In offshore markets it’s all about China. At 1:00 pm AEDT China’s National Bureau of statistics will release its Q4 GDP estimate along with Industrial Production, Fixed Asset Investment and Retail sales (all three December prints). The focus since the start of the year has clearly been offshore, with global financial markets getting off to a rough start in large part due to Chinese economic concerns. There is little doubt
that the performance of the Chinese economy will be one of the most important (if not the most important) themes for financial market watchers this year.

Economic Calendar 19 JAN

  • CH GDP Q4
  • CH Retail Sales/Industrial Production Dec
  • UK CPI Dec
  • GE ZEW Survey Jan

BellFx

 

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