Strong South Australia Business Readings Fail to Boost AUD/USD Exchange Rate
The Australian Dollar has traded in a narrow range against the US Dollar recently, mainly due to both currencies being equally matched at present.
There has been positive Australian data to refer to – South Australian businesses have high hopes about the next twelve months.
A recent Statewide Super Survey of Business Expectations has shown that almost 70% of businesses think the economy will either remain stable or improve this year.
These results were better-than-expected and have been a shot of good news as 2018 gets underway.
US Dollar to Australian Dollar Exchange Rate Falls Back on Fed Speculation
The USD/AUD exchange rate has been close of late, as trader concerns grow ahead of a highly important Federal Reserve event.
Fed Chair Jerome Powell will be making his debut before Congress in a questioning session; the main interest is how his plans compare to his predecessor, Janet Yellen.
Prior to his appointment as Chair, Mr Powell was widely considered a ‘safe pair of hands’ as the next leader after Yellen.
Powell’s appointment comes as the US considers the effects of the first year of Trump policies on the economy, as well as whether more interest rate hikes are needed.
Weekly Australian Dollar to US Dollar Exchange Rate Forecast: AUD/USD Turbulence Ahead on Fed Speech
There will be a limited amount of Australian economic data out this week, so the AUD/USD exchange rate may be more strongly influenced by US developments.
On the Australian front, the main data to watch out for will be Thursday morning’s AIG manufacturing index report for February.
This is tipped to show a slight reduction in sector activity during February, which could weaken the Australian Dollar to US Dollar exchange rate.
For sources of USD movement, it will be worth watching out for a speech from Federal Reserve official Randal Quarles on Tuesday.
Mr Quarles has previously supported ‘gradual’ interest rate hikes; if he repeats his support of higher interest rates then the US Dollar could firm in value.
Another high-impact US announcement will be the durable goods orders report out early on Wednesday.
This is tipped to show a significant slump in orders reported during January, from 2.9% to -2% on the month.
Lower orders in the post-Christmas lull might be to be expected, but such a result is still likely to lower demand for the US Dollar.
As mentioned above, the main US event this week will be testimony from Federal Reserve Chair Jerome Powell.
If Mr Powell supports a fast pace of interest rate hikes then the USD/AUD exchange rate could rise.