Risk confidence in the markets ought to direct the safety bet US dollar lower than the Australian currency today as corporate earnings season starts to kick in. Global stock exchanges today are showing that despite profit-taking from the early surge due to the new year, the bulls are starting to come back.
US stock index futures are pointed to a higher open on Wall Street today, following gains in Europe and Asia in earlier exchanges. after Dow component Alcoa kicked off earnings season with better-than-expected results. Late yesterday, Alcoa, the largest aluminum producer in the US and a bellwether stock for the state of the US economy, kicked off earnings season with a positive outlook for 2013, as reported by CNBC and Reuters. These price movements in the stock markets pave the way for an appreciation in the risk confidence of market participants heading into the New York session.
From a report by Joseph Ciolli of Bloomberg, “I think most of the story is flows and repositioning,” said Greg Moore, a currency strategist at Toronto-Dominion Bank by phone from Toronto. “It’s been very quiet, there’s been very little data out, pretty few fundamental changes.”
A long position is recommended for the AUDUSD in light of corporate earnings. However, the bullish run by the currency pair is seen to be limited data from the Land Down Under showed that Australian retail sales unexpectedly declined for the first time in four months. Consumer spending on household goods and clothing in November was less due to a weaker employment outlook. Sales dropped 0.1 percent to A$21.5 billion from a month earlier, when they were unchanged, according to the Australian Bureau of Statistics.
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