Summary:

  • Australian dollar got a few quite disappointing macroeconomic readings
  • FED’s Fisher steps down as vice Chairman of the Federal Reserve
  • Temporary debt ceiling deal struck, USD got a slight boost

The Asian session was a very calm one as all major indices hung around the breakeven line while the FX moves were strongly constrained. The key releases were unveiled from Australia and disillusioned market participants quite across the board. First and foremost, the most important print – retail sales – came in at 0% mom against a forecast at 0.2% mom. What’s more, the prior reading for June was revised down to 0.2% mom from 0.3% mom. Today’s data was for July, hence it constituted first input to Q3 GDP growth, unfortunately not upbeat.

link do file download linkA year-over-year reading of retail sales slid from 3.7% to 3.6% in July, however the services AIG could suggest an incoming rebound going forward. Source: Bloomberg

Moreover, AIG construction showed a decline to 55.3 from 60.5 in July. Even though it would seem that the releases marked a massive decrease, one needs to underline that the previous one was a record high, so there are no reasons to be concerned for the time being. Last but not least data came from trade balance which missed a forecasts marking a surplus at 460m AUD while 1bn AUD has been anticipated. The main reason standing behind that a miss was a 2% mom drop in exports whilst imports slipped 1% mom. It suggests that a supportive factor for the AUD (higher trade surpluses) remains in a downtrend.

link do file download linkAustralian trade surplus missed by far the consensus reflecting a sloping trend. Source: Bloomberg

Looking back to Wednesday, we got quite an interesting announcement from vice Chairman of the US Federal Reserve as he chose to step down from his position in mid-October citing ’personal reasons’. There was no a surprise according to people knowing him personally. Either way, it creates another tailspin within the FED because of as much as 4 posts will be left to be fulfilled anew. In addition, Yellen’s term as chair expires in February.

Finally, Democrats and Republicans struck the deal as for an extension of the debt limit by three months through December 15. The new package includes Harvey aid and government funding. As a result, the US dollar got a slight boost which in turn evaporated during the Asian session.

link do file download linkBleaker data from Australia could exert downward pressure on the AUDUSD in the nearest future. Source: xStation5

Technically, the pair has drawn a few bearish candlesticks of late which could be a warning sign for bulls. If the pair respects a hefty resistance zone, it could go lower towards 0.7875 where a first more notable support is placed.