The Australian economy has grabbed investors' attention after it recorded a stronger economic boom during the first quarter this year, as flood rebuilding process to accelerate during the second half of the year, fueling economic recovery and the supporting the economy to rebound.
The Australian dollar has witnessed a slight drop during the past week after Singapore's economy reported that the Central bank is to expand the currency gains, as the nation aims to curb inflation pressures after the fastest expansion during the first three months this year.
Moreover, the carry trade has returned as a popular tool to leverage currency bets, supported the Australian dollar to continue its upside movement and pushed investors to higher yielding currencies such as the Aussie over another currencies.
The Australian economy is on the track after the recent fundamentals that showed employers added 37800 workers during the month of March, compared with the shed of 10100 workers in February.
The drop in unemployment indicates more demand for labor especially in the construction sector where the country needs more workers to participate in the rebuilding projects in Queensland after the flood, from another perspective this will increase the level of consumer spending which might somehow support the economy from a different angle.
On the other hand, Australia gave investors a cheerful outlook for investment in Aussie, as higher demand for resources helped compensate for the decline in consumer spending, increasing resource demand that is working to push the mining sector forward, which supported the AUD to increase against major currencies.
In the week ahead, the Australian dollar will continue its upside movement, as the market will witness cheerful fundamentals from the Australian economy this week that confirmed economic growth.
Major highlights for this week that will affect the AUD/USD pair's trading:
Monday April 18:
Australian economy has no releases, while the U.S. economy will issue NAHB housing market index for April at 14:00 GMT, and is expected to come at 17 the same as previous reading.
Tuesday April 19:
The Australian economy will release the Reserve Bank of Australia minutes for the month of April at 01:30 GMT, which has a strong impact on the market.
On the other hand, at 12:30 GMT, U.S. economy will release building permits for March, and expected to come at 540 thousand compare with the previous of 517 thousand. The housing starts for March will be issued at the same time, and is expected to increase to 520 thousand from 479 thousand.
Wednesday April 20:
Australiais to release the leading index for the month of February at 00:30 GMT that showed a drop by 0.1% in January.
Moreover, the Australian economy continues releasing important data, where it will present the quarterly import price index for the first three months of 2011 at 01:30 GMT that dropped by 3.8% in the quarter of September to December in 2010. The first quarter exports price index will be released at 01.30 GMT, where it showed a decline by 8.1% a quarter earlier.
Australia's producer price index (PPI) (1Q) will be released issue at 01:30 GMT, where the previous reading rose by 0.1% during the fourth quarter of 2010, while annualized PPI is to release for the year ended March 31, after an increase by 2.7%.
On the other hand, The U.S economy is expected to release existing home sales for March at 14:00 GMT, the reading is expected to come at 5.00 million with 2.5 percent from the previous 4.88 million.
The U.S. housing data is anticipated to show some improvement during March, which could help greenback to rebound against the aussie unless the risk appetite was strong enough to keep aussie on gains.
Thursday April 21:
At 12:30 GMT, U.S economy will issue its weekly initial claims numbers, where the number of people filing for first-time claims for the state unemployment insurance has reached 412 thousand.
The U.S. house price index for February will be issued at 14:00 GMT. The leading indicators index for March is expected to retreat to 0.2% from the previous increase of 0.8%.
Finally, U.S. economy will release Philadelphia Fed Index for April, which expected to slow to 37.0 from the previous 43.4.
Friday April 22:
The week ends on a short note as the market will be out with central banks holiday on Good Friday.
Originally posted here
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