By TraderVox.com
Tradervox.com (Dublin) – The cross opened the week at 1.0234 and dropped to a low of 1.0202; however, the pair staged an impressive run, climbing to 1.0444, breaking through the resistance line at 1.0402 to close the week at 1.0422. This has been attributed to the weak US data including the unemployment claims and manufacturing data. There are several releases this week from Australian that will affect the cross and they are discussed below.
On Monday, the Australian PPI will be released. The previous release was not impressive as it came in down by 0.3 percent, registering the first decline since January 2010. The market is expecting July reading to rebound and record a 0.3 percent increase. The PPI index will be released at 0130 hrs GMT. The other important event will be the Chinese Flash Manufacturing PMI which will be released on Tuesday at 0230 hrs GMT. The index has been below the pivotal level of 50 since October last year, which indicative of contraction in Chinese manufacturing industry. Any changes in Chinese data affect Australian as this is Australia’s biggest trading partner.
Almost about half an hour later, the RBA Governor Glenn Stevens will speak on the state of economy in Australia at 0305hrs GMT. Traders have a keen eye on his speech as it might contain clues of future monetary policy. If his speech is more hawkish than the market expectations, this pushes the Australian dollar. The other event to put a close eye on is the CB Leading Index which will be released on Wednesday at 0000hrs GMT. The index declined for the first time since January in June, but an improvement is expected this time round.
The CPI data will be released on Wednesday at 0130hrs; this index has remained constant with very little change since the third quarter in 2011. The market expects a increase of 0.6 percent for the second quarter this year. The Trimmed Mean CPI which will be released at the same time on the same day is also expected to rise with the same margin.
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