The first full week of 2015 seems to be a rather quite week; it should prove to continue the current trend, at least in regards to the data due out in Australia.
Today at 10.30 AEST the Australia Trade Balance is due for release. At face value it is looking to have a negative effect on the AUD/GBP. Last month’s figure improved to -1.32 Billion from -1.85 Billion; this pushed the AUD slightly higher against the GBP. This month market analysts are expecting the figure to worsen; market expectations are -1.59 Billion.
The Trade balance figure is important because there exists a direct link between export demand and currency demand, as foreigners must buy the domestic currency to pay for the nation’s exports. Therefore, if it is significantly negative result, the AUD will tend to fall as there is less demand for the currency.
Building approvals also are expected to be quite negative, similar to the trade balance figures. Last month the Building Approvals figures stunned the market coming in at 11.4% from the previous figure of -11.2%…a massive turnaround which gave the AUD short term momentum. This month the market is expecting the figure to go back to the negatives to -2.7%. At face value this should continue the AUDGBP in its overall trend of AUD weakness.
The next few results to keep an eye out on are the late week figures from China, being the Chinese Inflation and Trade Balance figures. The CPI figure out on Thursday is expected to be slightly stronger then last month’s figure of 1.4%; the January figure is expected to be released at 1.5%.
The Trade Balance figure is not expected to turn to many investors heads on Friday. However, since October 2014, the figure has increased in 10 billion increments. This happened when the market was expecting a figure similar to the previous month. This may be the AUD last hope this week for some short term strength. From previous figures, a positive release has the capacity to strengthen the AUD slightly against the GBP by the close of market, early Saturday morning.