The Australian Dollar (AUD) continued its recent upward trend against the US Dollar (USD) as the AUD/USD exchange rate traded above 0.73c on Monday, reaching a low of 0.7302 and a high of 0.7382.
Stanley Fischer, Vic Chair of the Federal Reserve commented over the weekend that “considerable uncertainties” surrounding the economic outlook had left markets feeling that a rate hike is 2015 is now just an expectation, not a commitment. Traders appear to, for now at least envision a rate hike not coming until March 2016. The markets have reacted and providing plenty of short term support for the AUD.
The latter half of the week will see USD retail sales figures and CPI released which is the type of data that the Federal Reserve are looking for positive results to allow them to pull the trigger on rate increases. Without strong economic data things are looking to remain on hold for a while longer.
The AUD/USD exchange rate was trading at 0.7357 at 09:00 AEST.
As expected, Monday did not offer much in the way of volatility on the Foreign Exchange markets with zero headline data being released. Today sees plenty of data for the markets to digest. China will get things underway with the Trade Balance figure for September due, and a massive change is expected, forecasts for a Balance of $47.9B vs the $60.2B in August should see a flow on affect to the AUD on Tuesday morning.
The local market will see NAB Business Confidence released and if both these results are in favour of the Aussie we can look forward to a continued fight back from the local currency. The fight back against the GBP has been spectacular, only two weeks ago we were seeing GBP/AUD rates of $2.18 and today we are looking at $2.08. The U.K. will look to CPI figures released this evening to try and put a stop to the one sided recent movement in rates, however with an expected result similar to AUG of 0% things could keep moving in favour of the Aussie which is trading at an 8 week high against the GBP.
The GBP/AUD was trading at $2.0847 (0.4795) at 09:00 AEST this morning.