Australian 4th Quarter Consumer Price Index will be released in the early hours of the morning and are expected to remain the same as the previous quarters 0.7%. The Australian Dollar has started to move away from the recent highs which will be seen as positive for the RBA.
There will be a Reserve Bank meeting in the first week of February and I would not be surprised to see hints of rate hikes coming this year.
The recent announcement by Donald Trump to remove the United States from the Trans-Pacific Partnership negotiations has raised some questions regarding trade. If the deal was signed it would have been a great gain for the like of Australia however there now could be new offers on the table. The UK and Australia will meet soon to enter preliminary trade talks, which will mean there could be something in place the moment the UK leave the EU.
The US Dollar has started to fall away in the last few days which has maybe demonstrated some fears regarding Trumps presidency, however so far Trump has only made changes he declared he would. The next Federal Reserve meeting will be eagerly anticipated as there is expected to be more talk about further interest rate hikes for America. The last hike at the end of last year ended with the Aussie Dollar losing 5 cents against Sterling.
If there was to be another US hike the Aussie would be likely to lose further ground as investors move funds from the riskier AUD back to the USD. The next Fed meeting will occur on the 31st January next week so it will not be long before the fate of the Aussie becomes more clear.