The Australian dollar fell sharply on a mix of  a dovish RBA report and a Turkish crisis that became global. What’s next? Australia’s jobs report is in the limelight. Here are the highlights of the week and an updated technical analysis for AUD/USD.

The Reserve Bank of Australia left the interest rate unchanged as expected but hit the Aussie later in the week with a relatively dovish outlook. The doubts about inflation were joined by a risk-off sentiment that engulfed markets as the fall of the Turkish Lira could have implications for the euro-zone and the global economy. Trade tensions between the US and China did not help either for the Aussie dollar that dropped to the lowest levels since January 2017.

AUD/USD daily graph with support and resistance lines on it. Click to enlarge:

  • NAB Business Confidence: Tuesday, 1:30. This monthly report from the National Australian Bank dropped to 6 points back in June, but remains positive, indicating improving economic conditions. A similar figure is likely in the 350-strong survey for July.
  • Chinese Industrial Production: Tuesday, 2:00. China is Australia’s No. 1 trading partner. Industrial output rose at an annual pace of 6% in June and is now projected to rise by 6.3%. Increased output implies more metal imports from Australia.
  • Westpac Consumer Sentiment: Wednesday, 00:30. Consumer sentiment increased by 3.9% in June according to the survey of 1,200 Australian consumers. This big increase is unlikely to be repeated in July.
  • Wage Price Index: Wednesday, 1:30. Wages are becoming important all over the world and this official quarterly report is gaining traction. Salaries increased by 0.5% in Q1 2018, slightly below expectations. A quicker rise of 0.6% is on the cards now.
  • MI Inflation Expectations: Thursday, 1:00. The authorities publish official inflation figures only once per quarter. This publication from the Melbourne Institute fills the gap. Expectations increased by 3.9% in June. A similar figure is likely for July.
  • Jobs report Thursday, 1:30. Australia enjoyed a significant gain in jobs in June: 50.9K. This included 41.2K full-time jobs gained and 9.7K part-time jobs, a good composition. The unemployment rate stood at a healthy 5.4% with a participation rate of 65.7%. A more modest gain in jobs is likely now: 15.3K is on the cards. The jobless rate is expected to remain unchanged at 5.4%.
  • Phillip Lowe talks: Thursday, 23:30. The Governor of the RBA will testify in Canberra. He will speak about a broad range of topics and may provide more hints about future monetary policy. Comments about trade will be of special interest.
  • Luci Ellis talks:Friday, 7:30. The RBA Assistant Governor will talk in Canberra and may add some information to the testimony of Lowe.
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