AUD/USD – Aussie Unchanged as GDP Close to Estimate

AUD/USD is unchanged on Wednesday, although the pair has shown some movement in both directions. This follows sharp gains on Tuesday, with the pair climbing close to 100 points following a soft services report out of the US. In the North American session, the pair is trading slightly below the 0.77 level. On the release front, Australian GDP gained 0.5%, just shy of the forecast of 0.6%. Australian AIG Construction Index dropped to 46.6 points. Later in the day, Australia releases its trade balance for July. In the US, JOLTS Job Openings sparkled with a gain of 5.87 million, easily beating the forecast of 5.58 million.

Australian GDP could not keep pace in the second quarter, as the gain of 0.5% was just half of the Q1 release of 1.1%. Still, this figure was just shy of the forecast of 0.6%, enabling the Aussie to hold its own on Wednesday. Earlier this week, the RBA maintained rates at 1.50%, as expected. Market sentiment was positive towards the Aussie as the RBA rate statement did not mention the strong climb of AUD/USD, which has risen 5.4% since the start of 2016.

After a spate of weak US numbers, there was positive news on Wednesday, as JOLT Job Openings climbed to 5.87 million, easily beating expectations. Last week, US employment numbers were dismal. Nonfarm Payrolls plunged to 151 thousand in August, down from 255 thousand a month earlier and well of the forecast of 180 thousand. Wage growth also disappointed, as Average Hourly Earnings edged lower to 0.1%, shy of the forecast of 0.2%. The CME FedWatch Tool is showing a substantial drop in the odds of a rate hike for both September and December – the likelihood of a September rise is at 19%, while the odds of a December hike are down to 39%. Even though the US labor market remains close to full capacity, many FOMC members remain uneasy about a rate hike, especially given the persistent lack of inflation in the economy. Key inflation indicators will be released in mid-September, just before the Fed policy meeting on September 21. These releases could play a critical role in determining if the Fed presses the rate trigger this month, or decides to revisit the rate question in December, exactly a year from the last rate hike.

AUD/USD Fundamentals

Tuesday (September 6)

• 19:30 Australian AIG Construction Index. Actual 46.6
• 21:30 Australian GDP. Estimate 0.6%. Actual 0.5%

Wednesday (September 7)

• 10:00 US FOMC Member Esther George Speaks
• 10:00 US JOLTS Jobs Openings. Estimate 5.58M. Actual 5.87M
• 10:00 US Beige Book
• 18:55 RBA Deputy Governor Philip Lowe Speaks
• 21:30 Australian Trade Balance. Estimate -2.65B

Thursday (September 8)

• 8:30 US Unemployment Claims. Estimate 264K

*All release times are EDT

* Key events are in bold

AUD/USD for Wednesday, September 7, 2016

AUD/USD September 7 at 11:00 EDT

Open: 0.7682 High: 0.7697 Low: 0.7643 Close: 0.7675

AUD/USD Technical

• AUD/USD was flat in the Asian session. The pair has shown limited movement in the European and North American sessions
• 0.7560 is providing strong support following sharp gains by AUD/USD in the Tuesday session
• There is resistance at 0.7701
• Current range: 0.7560 to 0.7701

Further levels in both directions:

• Below: 0.7560, 0.7440, 0.7339 and 0.7200
• Above: 0.7701, 0.7835 and 0.7938

OANDA’s Open Positions Ratio

AUD/USD ratio is showing little movement on Wednesday. Currently, long positions are evenly split, indicative of a lack of trader bias as to what direction AUD/USD will take next.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.