AUD/USD Daily Forecast

Tuesday, Apr 05 2016

From Australia, yesterday, Trade Balance data was published. In trend terms, the balance on goods and services was a deficit of $3,600m in February 2016, a decrease of $14m on the deficit in January 2016. In seasonally adjusted terms, the balance on goods and services was a deficit of $3,410m in February 2016, an increase of $254m (8%) on the deficit in January 2016. Analysts were anticipating deficit of $2,550m.

However, the focus of the session was on RBA interest rate decision and the following statement. The Reserve Bank of Australia held its cash rate at a record low 2.0% as expected on Tuesday, but noted that new information should allow a better assessment of the labor market. At today's meeting, the Board judged that there were reasonable prospects for continued growth in the economy, with inflation close to target.

The Board therefore decided that the current setting of monetary policy remained appropriate. Over the period ahead, new information should allow the Board to assess the outlook for inflation and whether the improvement in labour market conditions evident last year is continuing. Continued low inflation would provide scope for easier policy, should that be appropriate to lend support to demand.

In the US session Trade Balance, Non-Manufacturing PMI and JOLTS Job Openings figures were published. The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced that the goods and services deficit was $47.1 billion in February, up $1.2 billion from $45.9 billion in January, revised. February exports were $178.1 billion, $1.8 billion more than January exports. February imports were $225.1 billion, $3.0 billion more than January imports.

The Non-Manufacturing PMI registered 54.5 percent in March, 1.1 percentage points higher than the February reading of 53.4 percent. Smaller increase to 54.5 was expected. This represents continued growth in the non-manufacturing sector at a slightly faster rate. The majority of respondents’ comments indicate that business conditions are mostly positive and that the economy is stable and will continue on a course of slow, steady growth.

Job openings were little changed at 5.4 million in February. The job openings rate was 3.7%. The number of job openings was little changed in February for total private and for government. Job openings increased in educational services (+48,000) and federal government (+19,000) but decreased in health care and social assistance (-147,000), finance and insurance (-54,000), and mining and logging (-8,000). Job openings edged up in construction (+36,000) and edged down in durable goods manufacturing (-19,000).

There will be no major data releases both from Australia and USA tomorrow, so we can expect a bit steadier session.

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