Friday, June 09, 2006

Weekly Outlook: Aussie Cools Its Heels At A Bad Time

The plethora of data released for the aussie this past week could not save it from overpowering dollar strength and weak commodity prices, especially considering the mixed nature of data.This coming week much more brief, which may lend even less support to the currency as it consists almost completely of surveys and lacks any heavy economic announcements.

Traders will have to wait until Monday night for the first release as Manpower Inc announces its third quarter employment outlook. With the labor market showing strong improvement, the outlook should be positive, however this may be slightly dampened by evidence that a cooling economy may be hurting companies’ intentions to hire more workers. Tuesday, National Australia Bank releases its May business survey. Recent surveys have shown that, despite higher fuel, wage, and borrowing costs, businesses do have a positive outlook for their futures and have confidence in the economy.

The next day lists the Westpac consumer confidence survey for June. Confidence fell 6 percent during May after the Reserve Bank raised rates 25 basis points, but should have recovered slightly as consumers become accustomed to the higher rate. Thursday has the RBA bulletin for May to provide figures on the foreign exchange activity of the bank for April. Also released will be consumer inflation expectations for June. May’s expectations revealed that the majority felt prices would rise considerably. Expectations for June may be slightly less severe after last month’s rate hike but the price of energies will be in the back of Australians’ heads.

Read more here.

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