RBA Governor Philip Lowe spoke at the 2017 Crawford Australian Leadership Forum and laid out the good, the bad and the ugly about the Australian economy. All in all, the Governor managed to keep AUD/USD limited.
The good: Lowe said the Australian economy is likely to grow slightly faster in the next few years. The global economy is also improving. Australia still relies on China. Another positive is the jobs market, that has strengthened alongside business surveys.
The more worried comments are also related to the jobs market, on the wages front. The slow pace of wage growth contradicts the higher pace of debt accumulation and rising housing prices.
Lowe also added that economic reforms are needed, sounding a bit like ECB President Mario Draghi. Draghi also recently began talking about slowing wages.
More specifically about the job market, Lowe says that workers are worried about foreigners and robots and value security over asking for large wage rises. Another interesting point relates to full-time and part-time jobs: Lowe says the distinction is old-fashioned.
The Australian dollar currently trades at 0.7613. In the past three days, the pair has been capped by 0.7640, which emerges as a new line of resistance. Will the pair fall after the successive failures?
Looking down, support awaits at 0.7566, followed by 0.7520.
Here is the daily chart. Click to enlarge:Get the 5 most predictable currency pairs