Australian Dollar to US Dollar (AUD/USD) Exchange Rate Predicted to Soften ahead of Chinese Leading Index

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United States Dollar (USD)

AUD/USD Conversion Rate Forecast to Hold Losses ahead of Australian Consumer Prices

The Australian Dollar to US Dollar exchange rate softened by around -0.3% during Tuesday’s European session.

After September’s Chinese Industrial Profits contracted far less than the previous month’s depreciation of -8.8%, the Australian Dollar edged higher versus many of its currency rivals. Aiding the appreciation was a fractional rise in the ANZ Roy Morgan Weekly Consumer Confidence Index from 113.3 to 113.4 for the week ending October 25th.

ANZ Co-Head of Australian Economics Felicity Emmett stated; ‘ANZ-Roy Morgan Consumer Confidence consolidated just above its long run average last week. Sentiment about current personal finances fell sharply, likely reflecting news of higher mortgage rates. Household views about their own finances remain fairly solid though. It’s the economic outlook that worries them. For some time they have been without a positive narrative on the prospects for the economy. But a broadly stable unemployment rate over the past year, and the hope that Prime Minister Turnbull can deliver better medium term outcomes for the economy, are factors which look to have driven some improvement in households’ economic outlook. The challenge will be to maintain this upward trend in an environment where the housing market looks to be slowing.’

The Australian Dollar to US Dollar (AUD/USD) exchange rate was trending in the region of 0.7227 during Tuesday’s European session.

USD/AUD Exchange Rate Predicted to Hold Gains ahead of FOMC Rate Decision

Despite the fact that US economic data produced disappointing results during Tuesday’s North-American session, the US Dollar strengthened versus its major peers. The appreciation can be linked to the fact that trader focus is dominated by the forthcoming Federal Open Market Committee (FOMC) interest rate decision.

Whilst the Fed is not expected to move on rates at this juncture, given the short period of time between decisions to assess data trends, the accompanying press conference is likely to be revealing. If Fed Chairwoman Janet Yellen adopts hawkish rhetoric with regards to the timing of a lift-off, the US asset is likely to strengthen considerably.

‘Investors will want to look carefully at the Fed’s statement to see if it is, on balance, more hawkish or less so than the last one. When and if it finally does raise rates, the Federal Reserve will not want to surprise markets,’ said David Kelly, chief global strategist at J.P. Morgan. ‘Thus, if it wants to leave the door open to a December tightening, it will want to pave the way by striking a more hawkish tone in its October statement.’

The Australian Dollar to US Dollar (AUD/USD) exchange rate dropped to a low of 0.7212 during Tuesday’s European session.

Australian Dollar to US Dollar (AUD/USD) Exchange Rate: Volatility Forecast on FOMC Rate Decision and Yellen Statement

As mentioned above, with trader focus dominated by the FOMC rate decision the currency market is likely to see subdued trade. With that being said, however, the Australian Dollar is likely to see volatility in response to the publication of the Chinese Leading Index and Australian Consumer Price Index.

The Australian Dollar to US Dollar (AUD/USD) exchange rate climbed to a high of 0.7258.

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