Despite the fact that most currencies are strengthening against the US dollar this morning, the Australian dollar is currently selling off. The Reserve Bank of Australia's Debelle is set to speak at an event mid-week. Ian Harper, an RBA board member, recently suggested that interest rates may move lower if consumption continues to fall. Thus markets will be closely watching Debelle's comments to gauge how various board members are looking at recent economic data from the country. Despite the pessimism, the Aussie looks oversold to us and is vulnerable to a rebound.
AUD/USD is currently trading below 0.7760. Looking at EUR/AUD, the exchange rate remains above 1.50, and is currently above 1.5110. Finally, the pound has been gaining against the Aussie, with the GBP/AUD exchange rate above 1.69.
This week’s economic data releases include surveys and housing debt-related announcements. On Tuesday, we’ll get business confidence survey results. On Wednesday, we’ll get consumer confidence data. Finally on Thursday, we’ll see home loan growth, investment lending for housing and consumer inflation expectations. Given the ongoing housing boom in Australia, investors watch data relating to housing fairly closely. Last week's weak retail sales data dissapointed the markets, causing AUD to sell off sharply.