AUD/USD – Listless as Markets Await US Housing Data

It’s been an uneventful week for AUD/USD, and this trend continues on Friday, as the pair trades in the mid-0.87-range in the North American session. In economic news, the sole US release on the schedule is New Home Sales. The markets are expecting the indicator to soften this month, with an estimate of 473 thousand. There are no Australian releases on Friday.

In the US, jobless claims were softer than expected. Unemployment Claims rose to 284 thousand last week, much higher than the previous reading of 264 thousand, and above the estimate of 269 thousand. However, the markets were not too concerned, as the four-week average, which is less volatile than the weekly release, dipped to 281,000, a 14-year low. Meanwhile, weak inflation levels continue to point to slack in the economy. On Wednesday, this trend continued with soft consumer inflation numbers. CPI rose to +0.1%, an improvement from the previous reading of -0.2%. The estimate stood at 0.0%, so the markets clearly did not have high expectations. It was a similar story from Core CPI, which also posted a 0.1% gain, up from 0.0% a month earlier. This was shy of the forecast of 0.2% but still within expectations.

Down under, Australian Business Confidence remained steady, as the key indicator posted a reading of 6 points for the third straight quarter. The Aussie initially improved after the release, climbing above the 0.88 line. However, the currency reversed directions and gave up these gains. Earlier in the week, the RBA released the minutes of its last policy meeting. Predictably, the RBA took a shot at the high value of the Australian dollar, with the central bank saying that the currency was still weighing on the economy. However, the minutes noted that Australian growth continued to be “moderate”.

AUD/USD 0.8777 H: 0.8784 L: 0.8720