The Australian dollar faced a downtrend this week as positive economic data for the US and a slow Chinese economy caused investors to lose hope in the currency.
The AUD is consistently dropping against the USD, and we saw a 2.4% decline this past week alone.
Coming up today, the US is going to release its initial jobless claims report which could signal volatile market conditions for the AUDUSD. We are also expecting the Feds chairman Jerome Powell to make a speech later tomorrow regarding the monetary policy update in the region.
Next week, retail sales are at the top of the economic calendar for the AUD as it would help understand the consumer appetite in the region. Furthermore, the RBNZ is expected to release its interest rate decision which could signal volatility in the AUDNZD markets.
Australians are eagerly awaiting the decision on the wage increase as inflation continues to make life difficult across the nation. This decision comes in response to the growing inflation, reducing consumer appetite, and causing businesses to face the impact.
AUDUSD
The AUDUSD pair started off the week strong with a slow and steady climb, reaching heights of 0.67080. However, the recent release in the US retail sales data caused the pair to drop to lows of 0.66297. Investors are looking to the RBA for any hints on future market movements.
The US recently released its Retail Sales data which revealed better-than-expected numbers. This sent both the Australian dollar and the Dow Jones downhill. Upbeat retail sales data implies that consumers still have a good appetite which reduces the risk of recession.
Australia is facing major bumps as we now see an increase in unemployment in the country. While this may seem like bad news, it is still positive for the RBA as they will now rethink future rate hikes that could further worsen the employment situation in the region.
AUDJPY
The AUD/JPY pair faced a hard battle this week as the JPY put up a good fight for the top spot. The pair reached a high of 91.749 after consistently climbing the charts since the market opened on Monday. This comes despite weak economic data for the AUD.
The AUD is a commodity-linked currency that highly depends on the Chinese economy to thrive. However, the Chinese economy has been struggling which has caused the AUD to dip. The Chinese industry production was forecasted at 10.9% YOY but only came out at 5.6% YOY.
The JPY has had a good week thus far, as positive GDP data signals bullish market conditions. Furthermore, a lower-than-expected CPI result reveals that inflation in the region is stabilising, and the economy is going back to normal.
