- Aussie March building permits tanked, pushing the AUD/USD down to its lowest since January 3.
- The weakness in the housing market has created room for the RBA to cut rates ahead of elections.
The AUD/USD pair fell to a four-month low of 0.685 soon before press time in response to a weaker-than-expected Aussie housing data.
Australia’s Building Permits fell 15.5% month-on-month in March, reversing the 19.1% gain seen in February. The markets were expecting a 14% drop. The approvals fell 27.3% in annualized terms, having dropped 12.5% in the preceding month.
The slide in the building permits will likely boost expectations of an RBA rate cut next week. The central bank has, in recent months, signaled a willingness to cut rates, if required. Most investment banks are of the opinion that the weakness in the housing market will force the RBA to move the needle on rates in the second half of this year.
Further, a significant majority believes the central bank may move next week, as the slowdown in the property market has created room for the central bank to deliver an election campaign rate cut.
As a result, the AUD/USD pair risks losing ground further, having dropped in the last three trading days. As of writing, the pair is trading at 0.6989.
Technical Levels
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