AUD/USD: RBA lowers Australia’s growth forecast, cites currency strength


AUDUSD Movement

For the 24 hours to 23:00 GMT, the AUD slightly declined against the USD and closed at 0.7957.

LME Copper prices declined 0.2% or $10.0/MT to $6290.0/MT. Aluminium prices declined 0.7% or $12.5/MT to $1891.5/MT.

In the Asian session, at GMT0300, the pair is trading at 0.7958, with the AUD trading marginally higher against the USD from yesterday’s close.

Earlier today, the Reserve Bank of Australia (RBA) trimmed Australia’s economic growth forecast by half a percentage point for 2017 to 2.0-3.0%, citing the impact of a stronger Australian dollar on economic growth. However, the central bank reiterated its expectation that the economy would grow at an annual rate of about 3.0% over the next couple of years. The RBA left its outlook on average underlying inflation unchanged for the year ended December at 1.5-2.5%, later picking up to 2.0-3.0% by June 2019.

On the macro front, Australia’s seasonally adjusted retail sales climbed 0.3% on a monthly basis in June, compared to an advance of 0.6% in the prior month, while market expectation was for retail sales to rise 0.2%.

The pair is expected to find support at 0.7927, and a fall through could take it to the next support level of 0.7896. The pair is expected to find its first resistance at 0.7977, and a rise through could take it to the next resistance level of 0.7996.

The currency pair is trading above its 20 Hr moving average and showing convergence with its 50 Hr moving average.

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