AUD/USD has posted slight losses on Monday, as the Australian dollar continues to lose ground. Early in the North American session, the pair is trading just above the 0.75 level. On the release front, Australia will release the NAB Business Confidence report. In the US, there are no major releases on the schedule. FOMC member Lael Brainard will speak about monetary policy at an event in Chicago.
The Aussie is flirting with the 0.75 line, as AUD/USD continues to lose ground. The pair has lost close to 200 points in a week, and on Monday dropped to 0.7494, a low in the month of September. The RBA, which often frets about a high exchange rate, would like the Aussie to continue losing ground and head closer to the key 0.70 level. The bank held the benchmark rate at 1.50% last week, but is prepared to act if inflation fades or the economy hits some turbulence. NAB Business Confidence dropped to plus -4 in July, down from plus -6 a month earlier. Will the indicator rebound in the August report? We’ll get a look at consumer confidence on Wednesday, with the release of Westpac Consumer Sentiment.
After Janet Yellen provided an upbeat assessment of the US economy at the Jackson Hole summit last month, speculation rose that the Fed might raise rates before the end of 2016. With the Federal Reserve policy meeting just over a week away, US key numbers will be under the market microscope. We’ll have to wait until Thursday and Friday for major releases, highlighted by retail sales, CPI and consumer confidence numbers. If these numbers are stronger than expected, the odds of a rate hike next week will move higher, and the dollar could make headway against its rivals. Although the US labor market remains close to capacity, many FOMC members will be reluctant to approve a rate hike based solely on strong employment numbers and will want to see stronger numbers throughout the economy. Consumer spending remains a concern, but the main sticking point is weak inflation levels, which will likely weaken even further if the Fed raises rates. The likelihood of a rate hike in 2016 has risen since last week, with the CME FedWatch Tool indicating a 24% chance for a September move and a 44% likelihood of a December hike.
Monday (September 12)
- 13:00 US FOMC Member Lael Brainard Speaks
- 13:01 US 10-year Bond Auction
- 18:30 RBA Assistant Governor Christopher Kent Speaks
- 21:30 Australian NAB Business Confidence
*All release times are EDT
* Key events are in bold
AUD/USD for Monday, September 12, 2016
AUD/USD September 12 at 9:00 EDT
Open: 0.7542 High: 0.7550 Low: 0.7494 Close: 0.7515
- AUD/USD showed limited movement in the Asian session. The pair recorded slight losses but then recovered. AUD/USD is unchanged in North American trade
- 0.7440 is providing support
- There is resistance at 0.7560
- Current range: 0.7440 to 0.7560
Further levels in both directions:
- Below: 0.7440, 0.7339 and 0.7200
- Above: 0.7560, 0.7701, 0.7835 and 0.7938
OANDA’s Open Positions Ratio
AUD/USD ratio is showing long positions with a strong majority (60%), indicative of trader bias towards AUD/USD reversing directions and gaining ground.