EUR/USD clings to modest daily gains and trades at around 1.0350. Eurostat reported on Wednesday annual Core HICP remained steady at 5% in the Eurozone in November as expected. Investors await US ADP employment data and Powell's speech.
GBP/USD managed to stage a rebound from the 1.1950 area but lost its bullish momentum near 1.2000 as investors await the ADP private sector employment report from the US. FOMC Chairman Jerome Powell will deliver a speech on the economy and inflation later.
Gold price trades in positive territory at around $1,760 as the US Dollar struggles to find demand. Ahead of the ADP employment data from the US and Fed Chari Powell's speech, the 10-year US Treasury bond yield holds steady above 3.7%.
Bitcoin price action has spiked 5% over the last 24 hours, hinting at the start of an optimistic scenario. Previous publications have already explored why BTC is ready for a bear market rally from both short-term and long-term outlooks.
The AUD/USD pair, the “Aussie”, tells the trader how many US dollars (the quote currency) are needed to purchase one Australian dollar (the base currency). The AUD is a commodity currency whose country's exports are largely comprised of raw materials (precious metals, oil, agriculture, etc.).
The interest rates set by the Reserve Bank of Australia (RBA) have been among the highest of industrialized countries and the relatively high liquidity of the AUD has made it an attractive tool for carry traders looking for a currency with the highest yields.
Australia is a big exporter to China and its economy and currency reflect any change in the situation in that country. The Australian Dollar is known by its greater exposure to Asian economies. Also, the pair AUD/USD often rises and falls along with the price of gold. In the financial world, gold is viewed as a safe haven against inflation and it is one of the most traded commodities.
FORECAST FOR 2022
FXStreet’s contributors, surveyed at the end of December 2021, expected the AUD/USD Forecast to be at 0.7185 by the end of 2022.
Bonds: GACGB10 (Australian Government Bonds Generic Yield 10 Year), GNZGB10 (New Zealand Government Bond 10 Year) and T-NOTE 10Y (10 year United States Treasury note).
Indices: S&P/ASX 200 (stocks of the Australian Securities Exchange), S&P/TSX Global Gold Index (producers of gold and related products at the Toronto Stock Exchange).
ORGANIZATIONS, PEOPLE AND ECONOMIC DATA THAT INFLUENCE AUD/USD
The organizations and people that affect the most the moves of the AUD/USD pair are:
Reserve Bank of Australia (RBA) that issues statements and decides on the interest rates of the country. Its president is Philip Lowe.
Australian Government and its Department of Finance that implement policies that affect the economy of the country.
The US Government (and its President Joe Biden): events as administration statements, new laws and regulations or fiscal policy can increase or decrease the value of the US Dollar and the currencies traded against it, in this case the Australian Dollar.
Fed, the Federal Reserve of the United States whose president is Jerome Powell. The Fed controls the monetary policy, through active duties such as managing interest rates, setting the reserve requirement, and acting as a lender of last resort to the banking sector during times of bank insolvency or financial crisis.
In terms of economic data, as for most currencies, the AUD/USD traders have to keep an eye on:
GDP (Gross Domestic Product), the total market value of all final goods and services produced in a country. It is a gross measure of market activity because it indicates the pace at which a country's economy is growing or decreasing. Generally speaking, a high reading or a better than expected number is seen as positive for the AUD, while a low reading is negative.
Inflation measured by key indicators as the CPI (Consumer Price Index) and the PPI (Production Price Index), which reflect changes in purchasing trends.
Current Trade Balance, a balance between exports and imports of total goods and services. A positive value shows a trade surplus, while a negative value shows a trade deficit. If a steady demand in exchange for AUD exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the AUD.