The Australian dollar hit a 13-month low but managed to end the week off the lows. What’s next? The rate decision and retail sales stand out. Here are the highlights of the week and an updated technical analysis for AUD/USD.
The Australian dollar was sensitive to the global mood around trade. It dropped to 13-month lows as fears grew but recovered as Trump went for a less harmful option of curbing Chinese investment in the US. Australian private sector credit disappointed with slow growth but this did not rock the boat too much.
AUD/USD daily graph with support and resistance lines on it. Click to enlarge:
AIG Manufacturing Index: Sunday, 22:30. The Australian Industry Group’s 200-strong forward-looking survey of the manufacturing sector showed ongoing growth, with a score of 57.5 points in May, albeit below previous levels. A similar level is likely for June.
MI Inflation Gauge: Monday, 1:00. The Melbourne Institute’s monthly inflation indicator provides updated information about changes in prices while the government published such figures only on a quarterly basis. According to MI, prices remained flat in May. We will now get the figures for June.
ANZ Job Advertisements: Monday, 1:30. The Australia New Zealand Bank provides another look at the job market via this publication which examines ads. After two months of increases, ads remained flat in May. A return to growth may be seen now.
Caixin Manufacturing PMI: Monday, 1:45. The independent manufacturing PMI of the Chinese economy stood at 51.1 points in May. A repeat of the same score is on the cards for June, even though the official numbers missed expectations over the weekend. China is Australia’s No. 1 trade partner.
Commodity Prices: Monday, 6:30. After several months of y/y drops, prices of commodities rose by 3.6% in May. Another increase could be seen in June.
Building Approvals: Tuesday, 3:30. Changes in building consents are quite wild, but still, provide some insights into the housing sector. A sharp fall of 5% was recorded in April and May is projected to see a small increase of 0.1%.
Australian rate decision: Tuesday, 4:30. The Reserve Bank of Australia has not changed its interest rate in nearly two years. This time is unlikely to be different. Phillip Lowe and his colleagues are expected to leave the Cash Rate at 1.50%. The statement has hardly changed either in recent months. Any warning about trade relations may weigh on the Australian Dollar. The Reserve Bank of New Zealand came out with a slightly dovish statement and the RBA could follow.
AIG Services Index: Tuesday, 22:30. Australia’s services sector is doing better than the manufacturing one according to AIG’s figures. A score of 59 was seen in May.
Retail Sales: Wednesday, 1:30. The influential release came out at 0.4% for April, slightly above expectations, and gave a boost to the Aussie. We will now get the consumption numbers for May, which are projected to see an increase of 0.3%.
Trade Balance: Wednesday, 1:30. Australia enjoyed a trade surplus of 0.98 billion in April and is projected to enjoy a wider surplus of 1.21 billion in May. Australia exports more than in imports.
AIG Construction Index: Thursday, 22:30. Australia’s construction sector is lagging behind according to AIG, with a score of 54 points in May.
