Economic data to be released today that will be influential to the Australia Dollar will be associated with Foreign Direct Investment out of Chinese. Locally, the Australian economy will announce low-tier data associated with Credit Card Purchases and Balances. Trading today may appear somewhat range bound, but this may also be perceived as the calm before the storm tomorrow and later in the week.
Tomorrow is the more significant day in terms of market volatility. The Reserve Bank of Australia will be releasing the Minutes of the July Meeting at 11:30am AEST tomorrow and investors and economists ears will be standing up in anticipation for any wording from Governor Stevens, the Head of the RBA, to again make comment that the AUD is currently over-valued. Such a comment will once again drive the Aussie back down against the majors. This event risk is likely to add vulnerability to the AUD this week.
Tomorrow evening the UK will inform the public about their current inflation levels through the release of their Consumer Price Index Figures. They will be looking for a beat of the previous annualised figure of 1.5% to see further strength to the Pound. Following this international economic data, the USA will report on their Advance Retail Sales for the month of June. The States have targeted an increase from their previously printed figure of 0.3% to 0.6%. New Zealand will announce their inflation level on Wednesday morning and will look to improve their previous year-on-year figure CPI of 1.5%. If this occurs, we are likely to see the Kiwi hold its historical strength levels.
Looking forward this week, the Australian Dollar will look for support from economic releases on Wednesday out of China in terms of Retail Sales, Industrial Production and the all important Gross Domestic Product Figures. All of these figures are expected to be at least in-line with the previous month’s figures, however better than expected results may prop up the value of the Australian Dollar. On the other hand, if the Chinese economy fail to achieve similar or better results than the previous month than we can expect to see the AUD be subjected to a sell-off and lose some value.
Investors will be wary about pouring funds into the Aussie prior to the RBA Minutes out tomorrow, which is one of the key events this week in determining which way the AUD will move.