Week in FX Asia – AUD/USD Continues to Rise as US Data Under Performs

The Australian dollar had a volatile week. After stoping a downward trend on August 13 it seemed the currency was headed to the 0.92 resistance level. Instead US data, though weak, deflated the Aussie above 0.91. this reversal came during the Americas session where the AUD continued to climb until almost recovering fully on Friday.

The market continues to speculate on when the Fed tapering will begin. The stronger the economic indicators out of the US are the case for tapering strengthens along with the USD. This week the opposite happened. Weak numbers, although to be fair not that far off expectations, drove the USD down versus in major pairs.

The AUD received a further boost by commodities. Metals and energy received a boost from the tapering speculation as well as geo political events that could constrain supply.

Indian Rupee touches all time low

The INR continues to slide versus the USD. The government and the central bank have tried their best to defend the currency. The INR continues to be sold as capital continues to leave India. The outflows are further complicating the trade deficit as a weak currency has affected import prices with a direct inflationary impact.

The government on one hand is trying to device a plan to attract investment while modifying the limits of allowable outflows. This sends a mixed signal to investors. Bring your money, but don’t take it out. Due to the lack of confidence given the economic slowdown in India, not a lot of investors are willing to add to the local economy if there are new limits being imposed on a regular basis.

• Rupee Breaks Record Low Due to Currency Outflows
• Shanghai Composite Index Erases 5.6% Intraday Gains
• Singapore Job Growth Expected to Decline On Foreign-Labor Tightening
• Emerging Asia Sounds Appealing
• Japan Government Optimistic About End of Deflation
• China’s Economy Pickup Facing Tough Challenges Next Quarter
• Japanese Investor’s Purchases of Foreign Bonds Surge
• Japan Favours Tax Incentives to Corporate Tax Cuts
• India Central Bank Limits Rupee Outflows
• China Poised to Overtake U.S. as Biggest Importer of Oil
• India Inflation Rises Due to Rupee Fall
• Two Koreas Reach Industrial Zone Deal
• China Seeking to Streamline Production With Lower Capacity
• First Korea, Next The World? China overtaking Japan as Largest Tourist Visitors
• India Raises Gold Tax a Third Time
• Analysts Argue Japan Should Raise Taxes Now
• Former BoJ Member Says Tax Hike Should Wait
• Corporate Japan Capital Expenditure Continues to Fall as Machine Orders Are Lower in June
• China on Track to Overtake India as Number 1 Consumer
• Japanese GDP Slowdown Hits Oil
• Singapore GDP Revised Higher to 15.5 Percent
• Japan GDP Falls Back to Earth

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.