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 Retail Sales events to trade

Ah – shopping

The U.S.A. and the U.K. both release their monthly Retail Sales figures this week. As a key indicator of the health of the economy, how much the public spends at the shops is essential knowledge for currency traders and stock markets alike.

The US delivers two key data: Core Retail Sales and Retail Sales at 1.30pm GMT on Wednesday 15th. The main difference is that the Core figures exclude automobile sales, which can be volatile. US shoppers have been anything but reliable in the last year so last month’s 1% growth for Core isn’t any guarantee this month will also be positive, though forecasts are for 0.2%. As shoppers start thinking about Christmas, that is maybe to be expected and a drop would be extra worrying.

Britain’s shopping figures have suffered a similarly volatile pattern over the last year and a negative figure certainly won’t held GBP. The recent interest rate hike won’t have had a chance to impact domestic sales so any decline can’t be blamed on that. Analysts are positive seeing an upturn from -0.8% to 0.2% on Thursday 16th at 9.30am GMT, but will the markets see that as strength or wonder about growing personal debt?