Sterling made good gains against a weakening Aussie today, with the US Dollar making significant headway versus it counterpart from Down Under. Weaker than expected Chinese data triggered a slight sell off but there is still a lot of news to be published in the next few days that could have a major impact. UK GDP revisions this morning didnt cause any major surprises so what things are worth keeping an eye on over the next few days?
Firstly we have US Durable Goods and a speech by new Head of the Fed, Janet Yellen, tomorrow afternoon. US monetary policy has been a major driver for the Antipodean currencies who benefitted massively under the cheap supply of money through Quantitative Easing. Now that it is being unwound, the respective currencies have been sold off and the pace of this has been affected by the pace at which the Federal Reserve tapers. Yellen is known to be cautious but the speech will be closely analysed for further clues about policy- with US GDP revisions on Friday expect a lot of volatility as global confidence shifts.
EUR AUD trades will also need to watch German unemployment and inflation data tomorrow, and wider European unemployment and inflation on Friday. This could be a trigger for Euro weakness if inflation is low as it may force the ECB’s hand into action soon. The next rate meeting is next week so be prepared just in case.
Over the weekend we have Chinese Manufacturing PMI data and depending on the strength of this we will see Aussie movement- a strong showing will be good for the AUD by suggesting increased demand for Aussie raw materials, and a weak showing suggests worse news ahead for the Aussie economy. With The RBA rate decision in the early hours of Tuesday morning, the next few days could be the best opportunity to buy AUD for a while as I really cant see the RBA changing stance from last month where they seemed pretty happy with current interest and exchange rates. If you do need to transfer money to Australia and would like some assistance then please feel free to email Colm at [email protected] or call 01494 787 478