AUD/USD Daily Forecast

Thursday, Mar 31 2016

There were no data releases from Australia yesterday. The market is still reacting to Yellen’s speech which dampened expectations around the speed in which the Fed was going to raise interest rates. The change in expectations has meant that the AUD has become more appealing option as the higher yielding currency. However the strong AUD will now put the focus back onto the Reserve Bank of Australia’s decision next week to see if they will look to reduce interest rates in the hope of bringing the AUD down to a level they would prefer.

In the US session Unemployment Claims and Chicago PMI figures were released. In the week ending March 26, the advance figure for seasonally adjusted initial claims was 276,000, an increase of 11,000 from the previous week's unrevised level of 265,000. Smaller increase to 266,000 was predicted. The 4-week moving average was 263,250, an increase of 3,500 from the previous week's unrevised average of 259,750. This marks 56 consecutive weeks of initial claims below 300,000, the longest streak since 1973.

The Chicago Business Barometer increased 6.0 points to 53.6 in March, led by sharp bouncebacks in Production and Employment. Four of the five Barometer components increased between February and March, with only Supplier Deliveries declining on the month. The increase in the Barometer was led by a very sharp rise in Production, which followed an even steeper decline in the previous month. The biggest surprise came from the Employment component which rose above the 50 mark in March and to the highest level since April 2015. This followed a period of relative weakness compared with other activity indicators.

There will be no data releases from Australia tomorrow, but from China official and Caixin Manufacturing PMI data will be released. Both releases should show slight increase to 49.3 and 48.3 respectively. In the US session NFP, Manufacturing PMI and Revised Consumer Sentiment figures will be published. Analysts forecast increase to 206,00 in non-farm employment, while unemployment rate should remain unchanged at 4.9%. Manufacturing PMI should rise to 50.8, as well as Consumer Sentiment to 90.6.

Figures to watch:

China's Manufacturing PMI (Friday 2:00)

Caixin Manufacturing PMI (Friday 2:45)

Non-Farm Employment Change/Average Hourly Earnings/Unemployment Rate (Friday 14:30)

ISM Manufacturing PMI (Friday 16:00)

Revised UoM Consumer Sentiment (Friday 16:00)

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