By Kenny Fisher
The Australian dollar is steady in Tuesday trading. Early in the North American session, the pair is trading in the low-0.91 range. AUD/USD is trading in the low-0.91 level in Tuesday's European session. In Australia, the RBA did not make a move and left the benchmark interest rate at 2.50%. Retail Sales posted a respectable gain of 0.5%, but the Current Account deficit ballooned in October. Later on Tuesday, AIG Services Index will be released. It's a quiet day in the US, with no major releases on the schedule.
As expected, the RBA did not reduce interest rates on Tuesday. The benchmark rate has remained pegged at 2.50% since August. Although the Bank has not shied away from saying that the Aussie is overvalued and is impeding economic growth, it has been hesitant to reduce rates, and this was apparent once again on Tuesday. In other news, Retail Sales dropped to 0.5% in October, down from 0.8% the month before, but edged above the estimate of 0.4%. The current account deficit widened to -12.7 billion dollars, well above the estimate of -11.1 billion.
It was a busy start to the week for Australian releases. Building Approvals, a key event, is known for its sharp fluctuations. After a huge gain of 14.4% in October, the indicator tumbled, posting a decline of 1.8% in November. However, the markets were braced for a much sharper decline, with the estimate standing at -4.3%. Meanwhile, Company Operating Profits jumped 3.9% in Q3, its best result since 2011. The reading easily beat the estimate of 1.1%.
Over in the US, the markets will be keeping close tabs on this week's US employment releases, as the Fed is likely to step in and taper QE if employment numbers continue to improve. Unemployment Claims have looked sharp for the past two releases, and if the Non-Farm Payrolls and Unemployment Rate look solid, this week, the US dollar could gain ground.
AUD/USD for Tuesday, December 3, 2013
AUD/USD December 3 at 14:55 GMT
AUD/USD 0.9144 H: 0.9058 L: 0.9121
- AUD/USD is steady. The pair dropped to a low of 0.9058 late in the Asian session but has recovered and is trading above the 0.91 line.
- The pair is receiving weak support at 0.9119. This is followed by a stronger line at the key 0.90 level.
- AUD/USD continues to face resistance at 0.9229. This is followed by a resistance line at 0.9305.
- Current range: 0.9119 to 0.9229
Further levels in both directions:
- Below: 0.9119, 0.9000, 0.8893, 0.8735 and 0.8658
- Above: 0.9200, 0.9305, 0.9400 and 0.9508
OANDA's Open Positions Ratio
AUD/USD ratio is almost unchanged in Tuesday trading, continuing the pattern we have seen since the start of the week. This is reflected in the current movement of the pair, which is showing little change. The ratio is made up of a substantial majority of long positions, reflecting a trader bias towards the Australian dollar moving to higher ground.
It continues to be an uneventful start to the week for AUD/USD. With no major US events on Tuesday, it could be a quiet day for the pair.
- 00:30 Australian Retail Sales. Estimate 0.4%. Actual 0.5%.
- 00:30 Australian Current Account. Estimate -11.1B. Actual -12.7B.
- 3:30 RBA Cash Rate. Estimate 2.50%. Actual 2.50%.
- 3:30 RBA Rate Statement.
- 15:00 US IBD/TIPP Economic Optimism. Estimate 43.2 points. Actual 43.1 points.
- All Day - US Total Vehicle Sales. Estimate 15.8M.
- 22:30 Australian AIG Services Index.
*Key releases are highlighted in bold
*All release times are GMT