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
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.
Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Recommended Content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.