The Aussie is on a winning streak! Will the bulls push it higher again this week? Here are some events you should watch out for.
RBA’s meeting minutes (Nov. 20, 12:30 am GMT)
As expected, the Reserve Bank of Australia (RBA) kept its rates steady at 1.50% for a 27th month in a row.
Governor Lowe and his team upgraded their growth and employment forecasts even as they continue to worry over household consumption amidst low income growth, high debt levels, and falling asset prices.
What caught investors’ attention was the quarterly statement released a few days after the policy decision.
In it, RBA members shared that they don’t see a “strong case to adjust the cash rate in the near term” even though they still believe that “higher interest rates are likely to be appropriate at some point.”
Let’s see just how (un)hawkish members are when the meeting minutes are released tomorrow!
While Fed members are still fired up to raise their rates another time in December, some members (see below) aren’t as hawkish as many had expected them to be.
It also doesn’t help that the U.S. equities markets are taking hits from anticipation of higher borrowing rates in the near future.
Last but not the least, traders who are holding on to their dollars might start to take profits ahead of the Thanksgiving/holiday season.
Watch your charts closely in case we see momentum in the dollar’s weakness that could push its major counterparts (like the Aussie) higher!
Last Week’s Price Review
The Aussie will soon be marking its third consecutive week of net wins since the Aussie is currently the second top-performing currency of the week (as of 7:00 am GMT).
And demand for the Aussie was sustained for yet another week, thanks to rising gold prices, the good news that the U.S. and China will resume trade talks, and Australia’s better-than-expected jobs reports.
The Aussie actually had a weak start, likely because gold also started the week on a weak footing and risk aversion was the dominant sentiment on Monday.
The Aussie did try to fight back during Monday’s morning London session, thanks to China’s relatively upbeat Trade Situation Report. However, selling pressure was just too much for AUD bulls, so the Aussie closed out the day as a net loser.
AUD pairs eventually found support when the Wall Street Journal (WSJ) released a report claiming that U.S. Treasury Secretary Steven Mnuchin has talked with his Chinese counterpart, Vice Premier Liu He, in order to restart trade talks.
And when the South China Morning Post (SCMP) released a report, which basically repeated the WSJ report while also adding that Vice Premier Liu He will be going to the U.S. to restart trade talks, the Aussie reacted by jumping higher across the board even as gold prices turned lower.
However, the Aussie would be forced to give back some of those gains when Chinese Foreign Ministry Spokesperson Hua Chunying confirmed those trade-related rumors.
After that, the Aussie traded mostly sideways for some time, but was bid softly higher on Wednesday when the Greenback weakened and gold prices rose.
And when Thursday’s Asian session finally rolled around, the Aussie got a bullish boost, thanks to Australia’s stronger-than-expected jobs report.
There was some follow-through buying after that. But unfortunately for the Aussie, demand was capped when risk sentiment turned sour because of negative Brexit-related news during Thursday’s London session.
The Aussie then traded mostly sideways again after that. Most AUD pairs (except AUD/NZD) remained well above last week’s closing prices, though, so the Aussie is currently on course for another week of net wins.