Fundamental Forecast for the Australian Dollar: Neutral
- Uneven GDP Points to Uncertainty Ahead for Australia’s Economy
- Less dovish RBA and on balance better data flow helping AUD
- Identify Critical Turning Points for the Australian Dollar with DailyFX SSI
The Australian Dollar peaked over the October 12th high on Friday. The risk-on sentiment as displayed by the SPX500 back near the 2,100 level and a Reserve Bank of Australian that isn’t looking to talk down the currency like they have in the past has provided a consistent bid under the Australian Dollar. Australia’s currency strengthened most aggressively against the Japanese Yen, Canadian Dollar and US Dollar last week finishing higher by 2% across the board. Not only was AUD benefitted from Economic data in the form of retail sales that came in slightly better than expected at 0.5%MoM vs. exp. 0.4% and GDP, but the pricing in a rate cut by the RBA over the next year has nearly disappeared. If the US Dollar remains on weaker through the month of December, a push toward 0.7500 looks increasingly probable with the fundamental and Intermarket wind in the Australian Dollar’s sails.