FUNDAMENTAL AUSTRALIAN DOLLAR FORECAST: BEARISH
- The Australian Dollar[1] is heading into a calmer week for domestic data
- Still, it’s in retreat against the US currency
- And it’s very hard to see that changing
Find out what retail foreign exchange traders make of the Australian Dollar’s chances right now at the DailyFX Sentiment Page[2].
The Australian Dollar faces a lack of major, first-tier domestic economic data in the coming week and, given that last week’s full calendar saw AUD/USD[3] appreciably lower, it might be reasonable to assume that a sparser calendar might bring some reprieve.
For, to be sure, last week was rough on the currency. RBA Governor Philip Lowe sounded once again like a man in absolutely no hurry to raise interest rates[4] when he spoke in Melbourne. He praised the economy’s strong employment record and lauded rising business investment. However, he also lamented the paucity of wage settlements and longed aloud for wage gains of 3%. With inflation stuck at 1.9% corporate Australia seems unlikely to offer such largesse.
Official Australian employment data were mixed. Overall job creation missed forecasts in May[5] and was dominated by part-time hiring gains, even as the unemployment rate fell.
The coming week won’t bring anything of comparable importance to the data table. Investors will get a look at the minutes of the last RBA policy meeting but, given that Lowe has already spoken since, these seem unlikely to add much to what’s already known –that the record low, 1.50% Official Cash Rate won’t be going anywhere soon.
And that means that the Aussie is
