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AUD/USD Weekly Forecast - 18 June - 22 June

Saturday, Jun 16 2018
AUD/USD Weekly Forecast - 18 June - 22 June

AUD/USD suffered the strength of the US Dollar on a hawkish hike by the Fed and growing concerns over trade. The US Fed hiked for the second time this year and signaled another two hikes, above previous expectations. The message that Fed Chair Powell conveyed was a very upbeat one. Alongside an increase in inflation and an excellent retail sales report, the greenback advanced nicely. In addition, the growing trade tensions between the US and the rest of the world began weighing on risk currencies such as the Aussie. In Australia, the jobs report came out slightly below expectations, at an increase of 12K. Chinese industrial output also advanced at a slightly slower pace, 6.8% y/y. Despite the disappointing data, the bigger driver of the pair was the US Dollar.

Major events for the coming week:

  1. CB Leading Index: Monday, 14:30. The composite index increased by 0.2% last month, and a similar rise is likely now. The economy is humming along quite well, at least for now.
  2. Monetary Policy Meeting Minutes: Tuesday, 13:30. The accounts from the recent RBA meeting could shed some more light on RBA’s plans, who have not changed interest rates in nearly two years. The meeting minutes could reveal concerns about trade, views about China, and more.
  3. HPI: Tuesday, 1:30. The quarterly House Price Index provides a broad view of the housing sector. The HPI jumped by 1% in Q4 2017 and a drop of 0.9% is on the cards now.
  4. MI Leading Index: Wednesday, 00:30. The Melbourne Institute’s composite index moved up by 0.2% last time, exactly like the CB’s measure. Also here, a repeat would not be surprising.
  5. Phillip Lowe talks: Wednesday, 1:30. Fed Chair Jerome Powell, ECB President Mario Draghi, Bank of Japan Governor Haruhiko Kuroda, and RBA Governor Phillip Lowe will all participate in a panel discussion in Portugal at the ECB’s conference. It will be interesting to hear if any of them express concern over the deteriorating trade relations in the world.
  6. RBA Bulletin: Thursday, 1:30. This data dump by the RBA provides further insights about the economy. However, the RBA Monetary Statement tends to have a broader impact.

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