Aussie Dollar Gains as Business Confidence Firms, Boosting RBA Outlook

By DailyFx | Updated July 30, 2014 AAA

DailyFX.com -

Talking Points:

• NAB Business Confidence comes in at 8; Prior month 7

• NAB Business Outlook comes in at 2; Prior month -1

• Aussie Dollar appreciates against the US Dollar

The Australian Dollar traded higher against its US counterpart as National Australia Bank (NAB) reported its Business Confidence Index and Business Conditions Index figures for the month of June. The Business Confidence Index came in at 8, a point higher from last month, and the highest since January of this year. The Business Conditions Index reported its largest jump in six months coming in at 2, 3 points higher from the prior month.

The Aussie’s advance tracked a pickup in 2-year Australian bond yields, hinting the improved readings were seen as a boost to investors’ RBA policy expectations. Traders look to the two NAB indexes to imply the likelihood of an expansion or a contraction in Australian economic growth in the coming months. An expansion in the economy increases expectations of an increase in interest rates in the future, which typically bodes well for the relevant currency.

FXCM’s Real Volume Indicator showed a sharp spike in trading volume as the NAB data set crossed the wires. A pick up in volume is often seen as an indication of conviction that raises the probability of follow-through by investors.

Aussie Dollar Gains as Business Confidence Firms, Boosting RBA Outlook

AUDUSD [15 mins – 07/08/2014]. Created using FXCM Marketscope.

You May Also Like

Related Forex Analysis
  1. AUD/USD Downside Risks Remain With Bullish Reversal Patterns Lacking
    Forex News

    AUD/USD Downside Risks Remain With Bullish Reversal Patterns Lacking

  2. Japanese Yen May Rise as Year-End Capital Flows Begin to Emerge
    Forex News

    Japanese Yen May Rise as Year-End Capital Flows Begin to Emerge

  3. Dollar and Yields Slide Despite Improved US Data
    Forex News

    Dollar and Yields Slide Despite Improved US Data

  4. Video: Event Risk Can Set Off Volatility, but Carry Trends?
    Forex News

    Video: Event Risk Can Set Off Volatility, but Carry Trends?

  5. AUD/USD Technical Analysis: Aussie Drops to 4-Year Low
    Forex News

    AUD/USD Technical Analysis: Aussie Drops to 4-Year Low

Trading Center