This week is very light on domestic data; Australia is only expecting two major data releases.
The first event to happen in Australia will be an announcement from the Reserve Bank of Australia’s Deputy Governor Philip Lowe. Deputy Governor Lowe is responsible for advising Reserve Bank Board members, who then decide where to set the nation’s key interest rates. He also advises on matters relating to the financial system, and his public engagements are often used to drop subtle clues regarding future policy shifts.
Typically Lowe speaks bearishly about the AUD, in line with Governor Stevens’ comments. Should he continue this tone in today’s speech the AUD may move slightly lower against the USD. However, the strength and direction of any move will truly depend on which topics are covered, and more specifically what is said regarding those topics.
Australia’s Private Capital Expenditure (PCE) is the second major release, due out on Thursday. PCE figure is a leading indicator of economic health, as businesses are quickly affected by market conditions, and changes in their investment levels can be an early signal of future economic activity such as hiring, spending, and earnings. Since early 2013 the PCE has been struggling to demonstrate e strong figures of late; the figure peaked 12 months ago at 12.3%. On Thursday analysts are expecting -1.7% from an October figure of 1.1%.
The PCE release is an adjusted quarterly figure. If the expectations are realised the AUD may weaken. This could possible bring the AUD to its lowest point in the last month. With no AUD data expected after the PCE, the pair could potentially remain volatile with a downside bias until the weekend.