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Aussie rebounding after initial negative gap

Monday, Aug 22 2016

Aussie opened the session with a negative gap but managed to rebound in the course of an uneventful session. There are several fundamental factors that also helped to underpin the Aussie: the prospect of more accommodative monetary and fiscal policies is supportive of the global economic outlook, commodity prices continue to recover which benefits Australia’s terms of trade, Australia’s economy is growing at an above trend pace of 3.1% p.a. and real Australian interest rates (inflation adjusted) remain a magnet for foreign capital in the current global environment of ultra-low and negative rates.

This should be a quiet data week for the Aussie — not just on the domestic front but also globally — Haddad suggests most attention this week will be on FOMC chair Janet Yellen’s speech at the Kansas City Fed Economic Policy Symposium at Jackson Hole that will arrive later in the week. Westpac strategist Imre Speizer said investors were still mulling over comments by New York Fed president William Dudley, who last week highlighted two months of jobs growth, and San Francisco Fed chief John Williams, who suggested the country’s inflation target should be increased. (The Australian)

 

Aussie is currently being traded around 0.7620 level. Pair is likely to find support around 0.7580 area and resistance above 0.7650 handle.

More in this category: « USD - Major events in the week ahead Sterling higher despite no major data releases »

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