AUD/USD Daily Forecast

Tuesday, Dec 01 2015

From Australia, yesterday, Building Approvals and Current Account data was released. The trend estimate for total dwellings approved fell 0.6% in October and has fallen for seven months. The seasonally adjusted estimate for total dwellings approved rose 3.9% in October and has risen for two months. Analysts were predicting 2.4% decline. The trend estimate for private sector houses approved fell 0.5%, while private sector dwellings excluding houses fell 0.8% in October and has fallen for seven months.

The current account deficit, seasonally adjusted, decreased $2,402m (12%) to $18,104m in the September quarter 2015. Larger decrease to $16,600m was expected. The deficit on the balance of goods and services decreased $3,508m (32%) to $7,438m. The primary income deficit increased $1,106m (12%) to $10,054m.

Also, from China offical and Caixin Manufacturing PMI figures were published. The official purchasing managers index fell to 49.6 in November, the lowest level since August 2012. That compared with a median estimate of 49.8 which was also the level for September and October. The non-manufacturing PMI rose to 53.6 from 53.1 a month earlier. Another manufacturing PMI released by Caixin Media and Markit Economics edged up to 48.6 in November, exceeding the median estimate of 48.3. The gauge has a smaller sample size and includes smaller companies and exporters.

However, the focus of the session was on RBA interest rate decision and the following statement. Australia's central bank kept interest rates steady for a seventh month on Tuesday as data showed exports provided a huge lift to the economy last quarter and helped fill a gaping hole left by business investment.The Reserve Bank of Australia (RBA) did again note that low inflation meant there was room for a cut in the 2 percent cash rate should signs of recovery disappoint in coming months.

US session was marked by ISM Manufacturing PMI figures. The November PMI registered 48.6 percent, a decrease of 1.5 percentage points from the October reading of 50.1 percent. Analysts were forecasting increase to 50.6. Ten out of 18 manufacturing industries reported contraction in November, with lower new orders, production and raw materials inventories accounting for the overall softness in November.

Tomorrow's session will be marked by Australian GDP data. GDP is expected to grow by 0.7% in Q3. In the US session ADP job figures are scheduled for a release. Analysts are predicting increase by 191,000.

Figures to watch:

GDP (Wednesday 1:30)

ADP Non-Farm Employment Change (Wednesday 14:15)

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