The AUD/USD reached a 2.5 year high of .8065 last week.
Comments from RBA chief, Philip Lowe, that the central bank is not compelled to follow the USA’s higher interest rate policy only had a temporary effect on the Aussie.
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This week’s data calendar has several potentially market moving reports.
The RBA is not expected to adjust interest rates on Tuesday. However, if the board re-affirms their neutral-to-easing bias, the AUD/USD could retreat from recent highs.
Wednesday’s building approval data is usually a second-tier report but will be closely watched this month.
Thursday’s trade balance numbers are expected to remain in surplus, but the $1.77 billion consensus number is half of last month’s amount. This release would not have included the recent rally in the AUD, which would have a dampening effect on exports.
Friday’s Retail Sales data will have more impact on ASX stocks than the AUD. The forecast is an increase of .2%, which will keep the yearly sales pace barely in positive territory.
On balance, we expect the RBA and trade balance numbers to weigh on the AUD/USD, and potentially turn the trend back to the downside.
Investors looking to profit from the AUD/USD trading lower can look to buy the BetaShare ETF with the symbol: YANK.
YANK is an inverse ETF, which means the unit price increases as the price of the AUD/USD decreases. YANK also has a 2.5% weighting, which means a 1% change in the AUD/USD will correspond to a 2.5% move in the unit price.
The current price of YANK is $12.60. We calculate that when the AUD/USD trades back to the January low near .7300, the unit price will trade at $16.75.
BetaShare ETF: YANK
