AUD: looking up or down?

Looking up or down

The antipodean currency is often buffeted by changes in USD, CNY and other major trading partners making it a fun one to trade. This week offers some homegrown events that could get the markets excited.

There is a chance the Current Account will improve by nearly 1 billion USD on Tuesday 5th 12.30am GMT, which would start the week well. Retail Sales, out at the same time, are also forecast to improve (0.0% to 0.3% growth), while the big news is the Rate Statement, released at 3.30am GMT Tuesday 5th. In October, this was kept at a record low of 1.5% and there are mixed views on what will happen this week though most suspect it will stay the same. The argument is that low rates are stimulating the economy.

Later in the week, GDP is forecast to drop by 0.1% to 0.7% on Wednesday 6th at 12.30am GMT and the Trade Balance looks set to shrink by around 0.3 billion or so on Thursday 7th at 12.30am GMT. With mutterings about a recession or even depression in pundit circles, there is talk of a banking bubble built on a property bubble on a mining bubble on a commodities bubble all fuelled by a Chinese bubble. Is the Aussie economy about to go pop?

2 Bank Rate treats this week

Treat yourself

Bank Rates are like catnip for currency traders. They can’t get enough. The Press Conferences and Statements give a deep insight into the official view of the economy and offer invaluable views on the future direction of fiscal policy. This week we have two gems to trade.

Australia’s Reserve Bank reviews its Cash Rate monthly at 3.30am GMT on Tuesday 7th November.  Forecasts are for the current 1.50% to stay the same when it’s announced. The economy seems to be doing well with higher non-mining investment and increasing employment. However, stagnant wages and rising household debt levels are concerning and could explain recent poor retail sales. The Rate Statement, also at 3.30am GMT 7th November, should give traders an insight into how the Bank’s Monetary Committee views this mixed bag.

Staying with the southern hemisphere, New Zealand’s Reserve Bank is also reviewing its Cash Rate this week, but we’ll wait until 8pm GMT on Wednesday 8th to hear what they’ve decided. While markets are happy that the nation’s political leadership has been settled, Ardern probably wasn’t their first pick and business confidence could be stronger. Market predict no change at 1.75%, but the Press Conference at 9pm GMT is one to watch.

Your helpful weekly guide to the markets: 16th to 20th Oct

Just your average helpful friend

Helpful! That’s us. So to help you to earn more with TIQL we’re giving you this free guide to the markets and some key dates to watch this week. Economic news and announcements cause financial markets to move a lot, and may provide some opportunities to trade.

Remember, you can earn some extra cash by inviting people to trade with TIQL. You will receive $1 the very first time someone you invite makes a deposit of $5 of more. Whoever you invite also gets $1 USD to trade with; you can’t get better than that! You can keep earning as we pay you a percentage every time your supporters trade with TIQL.

CPI: 3 dates this week
New Zealand’s quarterly CPI (Monday 16th at 9.45pm) could rise from its flat 0.0% to 0.4% or possibly even 1.8% depending on who you ask. Either result should give the NZDUSD pair a boost.

Great Britain‘s yearly CPI change (Tuesday 17th at 8.30am GMT) isn’t setting traders pulses racing with predictions along the lines of ‘nothing happening.’ The sluggish economy may see a nudge up from 2.9% to 3.0%, but with targets set at 2%, no-one is going to like that much.

Canada’s monthly CPI (Friday 20th at 12.30pm GMT) concerned analysts when it shrank from 0.2% to 0.1% last month. Combined with worries over the strength of NAFTA the currency isn’t looking as strong as it was. Could it drop to 0.0% this week?

AUD: rate rise news
The Reserve Bank’s Monetary Policy Meeting Minutes (17th at 12.30am) should explain the Reserve Bank of Australia’s recent interest rate decision. The rate maintained its record low position of 1.5% at the start of October and some feels this is holding the currency down. Opinions about how wise the current policy is are rather varied though ‘stuck between a rock and a hard place’ was one recent judgement.

Employment: 4 key figures
GBP could see movement from the Average Earnings Index (Wednesday 18th at 8.30am GMT.) British workers’ wages have stagnated despite increasing inflation casting doubt on the Bank of England’s upcoming rate rise plans. We will be watching closely when Bank of England’s Mark Carney talks to the Treasury Select Committee on Tuesday 17th at 10.15am. Expect to get a good insight into his current rate policy and attitude towards the employment data. Low unemployment is good but if the jobs are poorly-paid and insecure, the economy isn’t going to start flying any time soon.

The United States‘ weekly Unemployment Claims (Friday 20th at 12.30pm GMT) has predictions for a small rise (243K to 245K) but that is in the context of a period of low unemployment and a similar wage problem to the U.K.

Australia also reveals its monthly Unemployment Rate this week (Thursday 19th at 12.30am GMT). At the same time, the monthly Employment Change data is released. Last month saw a bit of a jump in unemployment (29.3K to 54.2K) while the employment rate remained steady at 5.6%. Expectations are for a small fall in the numbers and the rate to stay around the same. Slow and steady wins the race or stalls the economy?

Here are the main news events to look out for this week:​

Monday 16th October
21:45:00 GMT NZD CPI q/q

Tuesday 17th October
00:30:00 GMT AUD Monetary Policy Meeting Minutes
08:30:00 GMT GBP CPI y/y
10:15:00 GMT GBP BOE Gov Carney Speaks

Wednesday 18th October
08:10:00 GMT EUR ECB President Draghi Speaks
08:30:00 GMT GBP Average Earnings Index 3m/y
12:30:00 GMT USD Building Permits
14:30:00 GMT USD Crude Oil Inventories

Thursday 19th October
00:30:00 GMT AUD Employment Change
00:30:00 GMT AUD Unemployment Rate
08:30:00 GMT GBP Retail Sales m/m
12:30:00 GMT USD Unemployment Claims

​Friday 20th October
12:30:00 GMT CAD CPI m/m
12:30:00 GMT CAD Core Retail Sales m/m
23:30:00 GMT USD Fed Chair Yellen Speaks
12:30:00 GMT 2017 USD Retail Sales m/m

Some Markets to Watch…

BTCUSD: bitcoin continues its steam roll upwards making new highs in the last week. If BTC continues its momentum, could we see $6000 this week? Downside support levels where the bulls might take action are shown in the chart below. Retracements tend to be fast and deep on this market so take care and always use a stop loss.

GBPUSD: Broke through the key price level 1.3250 and is now trading just below last week’s high. This pair has been moving in a channel making higher highs and higher lows since the beginning of the year and had broken through the 50% retracement at 1.35. Some daily closes above the 1.3250 and we might see the bulls push on to retest the yearly highs and top of the channel. If the bears can push this market down, we might see a retracement to old support and the 200 simple moving average.

Gold: It looks like the bulls have this market for now. The symmetrical pattern we were watching played out and we have had a daily close above the key resistance level at 1295. Watching to see if the bulls can push this to retest the recent highs.

USDJPY: Make or break level for the USDJPY here. Could be a good price for the buyers to load and continue this year’s upward move on gold.

Crude: Still watching the ABCD pattern play out for a retest into the $54.5 level and the 50% extension of the upward move which began in mid June. $53 is the level to watch this week for any defence by the shorts.

USDCAD: this pair is trading above key support at 1.24. We have resistance at 1.2750 and the next demand level at 1.2050.

 

Whichever way you think these markets are going to go, you can trade these and other markets from as little as 1 cent with TIQL.

Markets are often volatile during news events; all TIQL trades come with guaranteed stops to always protect you from losing more than you have invested in a trade.

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Recession averted – what will AUD cash rate be on Tuesday 7th?

With growth of 1.1% in the last quarter of 2016, many are cheering as Australia goes 25 years without entering recession. But some are wondering if that’s the right view to take.

not the smartest move – GIPHY

Some people are already muttering that the Cash Rate could drop to 1% this year. Forecasters think it will stay at 1.5% on Tuesday 7th March but Trump’s presidency causing USD to surge, and falling Chinese demand for Australian property due to their own economic difficulties could mean the cheering is premature. The Australian economy isn’t out of danger yet.

Retail Sales figures due at 12.30am GMT on Monday 6th will shed light on domestic confidence, but it’s the RBA Rate Statement at 3.30am GMT on Tuesday 7th that traders will focus on looking for signs of if and when a rate change could come.

Chart showing AUDUSD FX pair
More downside for the AUDUSD?

Saying that, forecasters have been known to be wrong in the past and perhaps the Reserve Bank will drop the rate sooner than expected. If that happens, hold on to your hats as AUD pairs will have a bumpy ride.

Whichever way you think AUDUSD is going to go, you can trade this and other markets from as little as 1 cent with TIQL. All TIQL trades come with guaranteed stops to always protect you from loosing more than you have invested in a trade.

Trump’s immigration hang up could push Australia east

You know it’s not going to be a great relationship when POTUS hangs up on you after moaning about the ex. Trump is apparently upset about a deal Obama made with Australia to take in some of their legitimate refugees, and there are reports he hung up on the Aussie Prime Minster.

Modern diplomacy at its best
Modern diplomacy at its best

With a week of massive Reserve Bank of Australia action ahead, all bets are off about the future of the English-speaking trans-Pacific relationship at this point. This could impact on the Bank’s rate decision this week as pundits suggest the country may start looking more towards Asia for future trade relations. China seems ready to step into the vacuum and social ties are already being strengthened in that direction instead.

A chart of the AUDUSD FX pari
Which way next for AUDUSD?

Monday – Retail Sales 12.30am GMT
Expectations are for a slight improvement from 0.2% to 0.3% moderating trading reactions to the souring Aussie/USA relationship from last week.

Tuesday – Cash Rate and RBA Rate Statement 3.30am GMT
We wonder if this is being hastily rewritten over the weekend in the light of the hang up debacle. The Bank will talk about the economic outlook and when future rate changes may happen. Traders will make buy or sell decisions based on the fiscal outlook indicated.

ThursdayRBA Governor Lowe speaks 9am GMT
The A50 Australian Economic Forum Dinner, in Sydney, is to host a key speech from the RBA governor. This could be the AUD highlight of the week and all Australian indexes are likely to experience turmoil as he drops clues about future economic policy. Anything he says about the political situation will be jumped on.

Friday – Monetary Policy Statement 12.30am GMT
This is the first statement of the year with the next one due in May. While traders will have a good insight based on events earlier in the week, they will pore over the details looking to analyse the bank’s view of the key factors for the currency – inflation and economic conditions. With economic conditions so tightly connected to the international political stage at the moment there is a lot of scope for movement in the markets as they react.

 

AUD trade balance and bank rates 3rd to 5th October

Tuesday 3rd brings a few choice events for AUD traders as the Reserve Bank announces the Cash Rate and makes the Rate Statement at 4.30am GMT. The Cash Rate dropped from 1.75% to 1.50% in August but pundits expect no changes this week. This announcement paves the way for the far juicier Rate Statement, which fills traders in on the economic factors which affected the Cash Rate decision as well as the Bank’s view of the economic outlook into the future. Whether this is hawkish or dovish affects the currency markets, and we can expect major volatility.

What we all wish hawk and dove mean
Hawk and Dove for a different generation

Wednesday 4th brings the Retail Sales monthly figure at 1.30am GMT, which surprised almost everyone by stagnating at 0.0% last month. Predictions are for a negligible rise of 0.2%, which would be welcome news for the Australian economy. Consumer spending is the main way of measuring how well the economy is doing so traders will be paying close attention.

77.3 is a key level for the AUDUSD pair this week
77.3 is a key level for the AUDUSD pair this week

Thursday 5th closes the AUD main events for this week and traders will be deciding which way they think the Trade Balance is going to fall at 1.30am GMT. The difference in value between imports and exports, this has a powerful impact on the value of the currency. Forecasts are positive, especially after last month’s results which were predicted to be good but were even better. August’s -3.25B dropped massively to -2.41B in September despite predictions of -2.65B, a fantastic result for anyone who bet on the upswing. This month another positive movement is on the cards, but pundits are cautious again with a prediction of -2.32B for October’s figures.