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4 Oct 2013
AUD/USD moves higher amidst “suspended” NFP’s
FXstreet.com (Athens) – The AUD/USD is trading higher the last hour, after having been under pressure during the mid European trading session, showing that the cross might have the momentum to move even further upwards.
AUD/USD moves higher amidst suspended NFP’s alongside with solid US markets opening
The AUD/USD has been moving upwards on Friday the most of the day – despite a slightly downwards movement in the mid European session – showing that the Aussie may have the potential to push the cross even further upwards. The Aussie is not flying blind; its uptrend shift might be well attributed to house bubble as well as on fiscal spending. Elaborating on, according to Westpac, there are signs that indicate the housing market in Australia is picking up, with the Bank's Economists noting "the last few months have seen a significant shift in Australia's housing markets with a surge in auction activity and signs of a quickening in price growth." Therefore in that case Australia might start worrying and do what its antipodean neighbor, RBNZ announced recently as of “it expects to raise rates by 2% between 2014 and 2016 to combat the rising prices in the housing market.” Therefore the first reason that the cross is upwards is that traders might have been priced in that RBA will also hike rates “sooner” than later”.
House bubble and government spending might lead RBA in a more hawkish stance
What’s more, apart from housing bubble, there might be also another reason that RBA might move in such a hawkish move. Elaborating on, Gibbs, Strategist at RBS, notes: "the LNP - now in power - is attempting to turn the debate towards more government infrastructure spending, borrowing more, running a bigger budget deficit for longer. From a markets perspective, Gibs mentions that this "should mean the down-turn in the “Aussie” and period of low interest rates may be less than otherwise." There is also an interesting survey confirming to a major or less extent the above; traders are not pricing in any further RBA interest rate cuts over the coming 12 months, according to data from Credit Suisse.
Technical Outlook on the AUD/USD
Emmanuel Ng of OCBC Bank, mentions that negative dollar vibes may continue to support the pair with the Australian Sep services index also improving significantly to 47.1 from 39.0 the previous month. We retain a buy dips posture for the pair in the interim with base building behavior still expected around current levels. Support is seen on dips towards 0.9285 area while 0.9435 should cap pending further cues.”
AUD/USD moves higher amidst suspended NFP’s alongside with solid US markets opening
The AUD/USD has been moving upwards on Friday the most of the day – despite a slightly downwards movement in the mid European session – showing that the Aussie may have the potential to push the cross even further upwards. The Aussie is not flying blind; its uptrend shift might be well attributed to house bubble as well as on fiscal spending. Elaborating on, according to Westpac, there are signs that indicate the housing market in Australia is picking up, with the Bank's Economists noting "the last few months have seen a significant shift in Australia's housing markets with a surge in auction activity and signs of a quickening in price growth." Therefore in that case Australia might start worrying and do what its antipodean neighbor, RBNZ announced recently as of “it expects to raise rates by 2% between 2014 and 2016 to combat the rising prices in the housing market.” Therefore the first reason that the cross is upwards is that traders might have been priced in that RBA will also hike rates “sooner” than later”.
House bubble and government spending might lead RBA in a more hawkish stance
What’s more, apart from housing bubble, there might be also another reason that RBA might move in such a hawkish move. Elaborating on, Gibbs, Strategist at RBS, notes: "the LNP - now in power - is attempting to turn the debate towards more government infrastructure spending, borrowing more, running a bigger budget deficit for longer. From a markets perspective, Gibs mentions that this "should mean the down-turn in the “Aussie” and period of low interest rates may be less than otherwise." There is also an interesting survey confirming to a major or less extent the above; traders are not pricing in any further RBA interest rate cuts over the coming 12 months, according to data from Credit Suisse.
Technical Outlook on the AUD/USD
Emmanuel Ng of OCBC Bank, mentions that negative dollar vibes may continue to support the pair with the Australian Sep services index also improving significantly to 47.1 from 39.0 the previous month. We retain a buy dips posture for the pair in the interim with base building behavior still expected around current levels. Support is seen on dips towards 0.9285 area while 0.9435 should cap pending further cues.”