AUD/USD has improved on Tuesday, as the pair has recouped most of the losses incurred on Monday. In the European session, the pair is trading in the mid-0.92 range in Monday’s European session. As expected, the RBA held interest rates at 2.50%. Retail Sales posted a weak gain of 0.2%, while Current Account continued to improve. In the US, it’s a quiet schedule, highlighted by Factory Orders.
There were no surprises from the RBA, as it maintained the benchmark interest rate at 2.50%, where they have been pegged since last July. The RBA noted that present monetary policy would “foster sustainable growth in demand and inflation”, and the Aussie reacted with slight gains. Meanwhile, Retail Sales, the primary gauge of consumer spending, posted a weak gain of just 0.2%, short of the estimate of 0.3%. This follows a poor showing from Australian Building Permits, which posted its third consecutive decline. The indicator came in at -5.6%, nowhere near the estimate of +2.1%.
It’s not often that a key indicator drops and magically recovers a day later. However, this was the case with ISM Manufacturing PMI. The well-respected ISM Business Survey Committee reported on Monday that the key index had softened in May, but has since corrected its reading. The index actually improved to 55.4 points in May, up from 54.9 points a month earlier. As well, Final Manufacturing PMI and ISM Manufacturing Prices improved. This points to an expanding manufacturing sector, which is good news for the recovery. The markets will be hoping for more good news from today’s highlight, Factory Orders.
AUD/USD for Tuesday, June 3, 2014
AUD/USD June 3 at 10:20 GMT
AUD/USD 0.9247 H: 0.9308 L: 0.9243
- AUD has posted gains on Tuesday. The pair dropped below the 0.93 line in the Asian session.
- 0.9229 is providing weak support. This is followed by support at 0.9119.
- 0.9361 is a strong line of resistance.
Further levels in both directions:
- Below: 0.9229, 0.9119, 0.9000, 0.8893 and 0.8757
- Above: 0.9361, 0.9446 and 0.9617 and 0.9757
OANDA’s Open Positions Ratio
AUD/USD ratio is pointing to gains in long positions in Tuesday trading, reversing the direction we saw a day earlier. This is consistent with the movement of the pair, as the Aussie has gained ground. The ratio currently has a majority of long positions, indicative of a trader bias towards the Australian dollar continuing to move upwards.
AUD/USD has posted gains on Tuesday. The pair has edged lower in the European session.
- 1:30 Australian Retail Sales. Estimate 0.3%. Actual 0.2%.
- 1:30 Australian Current Account. Estimate -7.1B. Actual -5.7B.
- 4:30 Australian Cash Rate. Estimate 2.50%. Actual 2.50%.
- 4:30 Australian RBA Rate Statement.
- 14:00 US Factory Orders. Estimate 0.6%.
- 14:00 IBD/TIPP Economic Optimism. Estimate 46.5 points.
- All Day – US Total Vehicle Sales. Estimate 16.0M.
*Key releases are highlighted in bold
*All release times are GMT
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