AUD/USD has gained ground on Wednesday, continuing the upward move which started a day earlier. In the North American session, the pair is trading in the mid-0.93 range. On the release front, Australian Construction Work Done disappointed with a decline of 1.2%, well below expectations. In the US, today's sole event is Crude Oil Inventories.
The Aussie has shown some life, as it trades at its highest levels in almost three weeks. The currency shrugged off a disappointing construction reading, as Construction Work Done, released each quarter, came in at -1.2% for Q2, well of the estimate of -0.4%. This weak release could point to some weakness in GDP, which will be released next week. We'll get a look at Australian Private Capital Expenditure, the key event of the week, on Thursday. The markets are expecting a third straight decline, so the Aussie could reverse its climb if the markets are unhappy with the reading.
US durables painted a mixed picture on Tuesday. Core Durable Goods Orders, a key indicator, came in at -0.8%, its worst showing in 2014. This was nowhere near the estimate of +0.5%. At the same time, Durable Goods Orders stunned the markets with a record gain of 22.6%. The reason? A huge increase in the purchase of passenger planes in July. The sharp jump did not have much effect on the dollar, and the indicator is expected to return to normal levels next month.
There was some speculation that the recent economic meeting in Jackson Hole might be a market-mover, so the markets were all ears as Fed chair Janet Yellen delivered the keynote address on Friday. Any hopes for some dramatic news were dashed, however, as Yellen did not provide any clues as to the timing of a rate hike. She reiterated that the US job market still needed to improve, so employment numbers remain a crucial factor in any rate move by the Fed. There is divergence in monetary stance between the ECB and the BOJ on the one hand and the Federal Reserve on the other. The Fed is close to winding up QE, while the ECB and BOJ may step in and provide stimulus to bolster the Eurozone and Japanese economies.
AUD/USD 0.9343 H: 0.9352 0.9310
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