2016-09-29 13:26:47

Yesterday's sharp rise in oil prices has provoked the rise in price of commodity currencies, particularly the Canadian and Australian dollars. Both currencies depend on oil prices, oil and gas sector is one of the main sectors of their economies.

Recent decline in the USD, which was caused by uncertainty about the prospect of interest rates in the USA, has supported the rise in the prices of commodities, including agricultural and mining sectors as they are also crucial for the economy of Australia. Iron ore, and liquefied natural gas continue to be among the major export items, although Australian government tries to refocus country's economy, developing construction, tourist, educational sectors.

Today, oil prices are falling, causing the decline in the Australian dollar. The pair AUD/USD continued to decline at the end of the Asian session and is declining at the beginning European session.

At the same time, uncertainty about possibility of the rate hike in the USA till the end of this year continues. At the last meeting on September 20-21, the Fed kept interest rates at the level of 0.5%.

It was said at the meeting that there were strong reason for the rate hike until the end of the year. However, some investors continue to believe that the Fed will raise rate not earlier than mid-2017 and instead of three increase as has been planned for 2017, the Fed may increase the rate only twice.

The Fed has lowered GDP growth forecast for 2016 to 1.8% from 2.0%.

Today at 15:30 (GMT+3) US news will be released including GDP price index for Q2, annual GDP for Q2. GDP data is one of the key indicators along with the labor market and inflation data which affects US Fed monetary policy decisions. The forecast for GDP in Q2 is +1.3%.

Today, many key representatives of the US Fed will deliver their speeches.

The head of Kansas city Fed Esther George has said today that differences of the Fed’s authorities are the right thing, and with the improvement of the situation in the global economy, the Fed should adjust interest rates.

At 17:00 FOMC member Jerome Powell will make a speech and 20:00 – the head of the US Fed - Janet Yellen.

During this period volatility in the financial markets will increase.

AUD/USD: the rise in oil prices.  Fundamental analysis for 29/09/2016