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AUD/USD Weekly Forecast – 30 May – 03 June

Saturday, May 28 2016

Events that marked the week:

There were no data releases from Australia at the beginning of the week, however Governor Stevens remarks moved the markets. RBA Governor Stevens was speaking at the Trans-Tasman Business Circle boardroom briefing. He said that he suspects there is quite some years of fiscal repair work for the government in the period ahead. It is true that inflation is very low, technically it is below RBA announced target, however medium term inflation targetting is not rigid and does not demand knee-jerk reaction from RBA.

He added that RBA's forecasts are not very different from Treasury's. Also he doesn't agree that RBA needs a different inflation target and that inflation targeting will work well into future, but nobody can control inflation in the short term. Inflation is a bit too low, but RBA sees exchange rate as a shock absorber. Furthermore, Stevens said that economic growth is continuing, stronger would be better, but it is not too bad.

 

Wednesday's session brought Construction Work Done data was released. The trend estimate for total construction work done fell 3.0% in the March quarter 2016. The seasonally adjusted estimate for total construction work done fell 2.6% to $47,928.8m in the March quarter. Analysts were predicting 1.4% decrease. The trend estimate for total building work done rose 0.9% in the March quarter. The trend estimate for non-residential building work done fell 1.6% and residential building work rose 2.2%.

 

Thursday was marked by Australian Private Capital Expenditure data. The trend volume estimate for total new capital expenditure fell by 2.8% in the March quarter 2016 while the seasonally adjusted estimate fell by 5.2%. Analysts were predicting decline by 2.4%. The trend volume estimate for buildings and structures fell by 3.6% in the March quarter 2016 while the seasonally adjusted estimate fell by 7.9%. The trend volume estimate for equipment, plant and machinery fell by 1.0% in the March quarter 2016 while the seasonally adjusted estimate fell by 0.5%.

 

This week markets will be looking at:

 

Company Operating Profits (Monday 3:30)

Building Approvals (Tuesday 3:30)

Current Account (Tuesday 3:30)

GDP (Wednesday 3:30)

Caixin Manufacturing PMI (Wednesday 3:45)

Retail Sales (Thursday 3:30)

Trade Balance (Thursday 3:30)

More in this category: « EUR/USD Weekly Forecast - 23 May – 27 May GBP/USD Weekly Forecast – 30 May – 03 June »

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