USD Trading Outlook
The market waited expectantly for the testimony from the Fed chairman but it turned out to be somewhat of a non-event. He refused to put a date on any ‘tapering’ of their QE program and said all options remain on the table and data dependant. I would have expected such statements to be more AUD/USD positive (risk positive, USD negative) but absolutely nothing happened.
Today’s economic calendar has Australian business conditions data as well as Chinese house prices.
The AUD enjoyed a recovery day yesterday with shorts covering ahead of another speech from Ben Bernanke tomorrow. The Aussie was the best performing of the major currencies and the bears will undoubtedly be getting a little nervous. Much of the bearish AUD sentiment has been based on negative China-rhetoric but once the bad news dries up then the AUD-sellers will start to cover.
BOJ minutes today are unlikely to contain any surprises so look to headlines out of China for guidance on the day.
The AUD recovered modestly yesterday after Chinese GDP data came in right on expectations. Today sees the release of the latest RBA meeting minutes and they might give the market something to trade against but overall it’s looking like it will be another quiet range-bound day.
The AUD got sold very heavily again on Friday after comments from the Chinese FinMin were interpreted as meaning that economic growth forecasts are likely to be lowered. These comments were revised in weekend official Chinese press reports and this has helped the Aussie make a modest recovery. After all this speculation, today’s official China GDP data will be very closely watched and is certain to bring plenty of volatility.
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