The Aussie enjoyed an uptrend last week despite the RBA’s rate cut. Can the bulls maintain their momentum this week?
Here are catalysts that can affect the comdoll this week:
Australia might not have top-tier releases scheduled over the next few days, but a couple of mid-tier prints should move it by a pip or two (or a hundred).
ANZ’s job ads (Jul 7, 9:30 pm GMT) data, for example, is considered a leading indicator for Australia’s employment data. Ditto for NAB’s business confidence report (Jul 8, 9:30 pm GMT), which has an employment component in its release.
MI’s inflation expectations (Jul 10, 9:00 pm GMT) and home loans (Jul 10, 9:30 pm GMT) normally triggers interesting intraday price action for the Aussie, but this time they will be printed about seven hours after the FOMC meeting minutes.
That means that, unless we see significant hits or misses, then bulls and bears can continue to take cues from the dollar’s price action.
China’s top-tier releases
The world’s second-largest economy and Australia’s largest trading partner is about to print some interesting reports!
First up is June’s consumer prices. If you recall, monthly inflation held steady in May while its annualized reading was pushed higher from 2.5% to 2.7% on the back of higher food costs.
This time around traders are expecting prices to slow down from 0.6% to 0.3% even as its annualized rate is expected to maintain its 2.7% reading.
Meanwhile, China’s trade surplus is expected to slip from 279B CNY to 276B CNY. Its dollar-denominated counterpart, on the other hand, might just balloon from $41.7B to $45.2B in June.
Watch out for notable trends that might affect demand for Australia’s exports!
Market risk sentiment
The Aussie is still one of the higher-yielding currencies out there, so it’s vulnerable to overall risk appetite.
This week pay attention to the Fed’s reaction to last Friday’s U.S. NFP release and its upcoming meeting minutes. Hints of urgency for Fed members to cut their rates once more could boost high-yielding bets like the Aussie and drag on the dollar.
Oh, and watch the newswires closely for updates on the U.S.-China trade negotiations, will you? While both sides have agreed to pausing any more tariff additions, China’s Ministry of Commerce has refused to further trade negotiations unless all tariffs are removed. Yipes!
Missed last week’s price action? Read AUD’s price recap for July 1 – 5!