AUD/USD Daily Forecast

Friday, Jan 22 2016

There were no data releases from Australia on Friday. Uncertainty across financial markets has led to the safe haven demand for the yellow metal, pushing Aussie up. Oil prices and global equity markets rebounded, following a turbulent few days that wiped trillions of dollars off asset values, though it was unclear whether the vigorous selling action had come to an end. Physical gold demand in Asia slowed this week as prices rose, curbing seasonal buying in China ahead of a long holiday and forcing sellers in India to offer a discount.

However, China is still in focus. Cut in global growth forecast by the IMF will further act as a positive factor for the yellow metal. China’s economy and central bank have taken on global relevance but it still has antiquated monetary practices compared with developed economies’ central banks. Monetary policy decisions aren’t made independently by the central bank. Nor does it hold news conferences or release a schedule of meetings or minutes of those meetings or provide public testimony on policy, as the Fed and other central banks do.

China's crackdown on capital outflows may have one unexpected casualty: Australia's casinos. For the gambling operators, Beijing's move to tighten foreign currency transactions and put an end to the use of underground banks will probably deter the high-stakes players coveted by the industry. The new government measures combined with a campaign against corruption have already pushed lucrative VIP gamblers away from Macau, the only Chinese jurisdiction where gambling is legal.

In the US session Existing Home Sales figures were published. Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, ascended 14.7 percent to a seasonally adjusted annual rate of 5.46 million in December from 4.76 million in November. Analysts were predicting rate of 5.21 million. After last month's turnaround (the largest monthly increase ever recorded), sales are now 7.7 percent above a year ago.

Monday will bring NAB Business Confidence figures. Analysts are hoping for another month of incline, following last month's surge to +5. There will be no data releases in the US part of the session.

Figures to watch:

NAB Business Confidence (Monday 1:30)

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