The fall of the Australian dollar continues after a break. Despite some positive figures from the land down under, the strength of the US dollar is just overwhelming. A note from Westpac about potential rate cuts weighs on the Aussie.
AUD/USD trades at 0.8386, at levels last seen in 2010.
Australian retail sales rose 0.4%, better than 0.1% expected. Trade balance saw a smaller than predicted deficit of 1.32 billion, contrary to 1.85 billion predicted. Both figures are for the month of October.
The pair already dipped below 0.84 yesterday on the weak Australian GDP, but managed to retake this level. It is not only falling back down, but digging deeper into lower ground.
Earlier in the week, the RBA left rates unchanged but did see a “need” for a weaker A$. We are getting some of that right now.
One of the reasons for the recent fall is an updated outlook by Westpac on the RBA: Chief economist Bill Evans Bill Evans sees the Glenn Stevens and co. cutting the interest rates twice in February and in March.
In addition, they see the low point of the Aussie as coming in June. The “fair value” is 0.79-0.81. They do see the fate changing in the second half of the year.
As the chart shows, the pair is getting closer to long term downtrend support. The all important line on the downside is 0.8066, and it’s around 300 pips away.
For more levels, technical analysis and events, see the AUDUSD prediction.
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