AUD/USD already traded at the 75 cent handle (the RBA’s target), falling to a low of 0.7587, before climbing just above 0.76.
The Australian dollar is under pressure following the release from three different sides. Here are the reasons for the recent fall.
- Australian data: Home loans in the land down under fell by 3.5%, significantly worse than 1.9% expected. The Westpac Consumer Sentiment also dropped by 1.2% after a gain of 8% beforehand.
- Chinese data: Chinese industrial production came out at 6.8% y/y, lower than 7.7% expected for the months of January and February combined. This two month compounding attempts to eliminate the volatility that results from the Chinese New Year. In addition, the China and Iron Steel Association says that the production of steel in production in China will fall in 2015. Also Fixed Direct Investment missed with +13.9% and retail sales with +10.7%, both under predictions.
- USD strength: The greenback continues showing its might across the board. The elevated expectations for the removal of forward guidance and the consequent rate hike in June is helping the $. It is important to note that not all currencies react in the same manner, but the Aussie is one of the weaker currencies.
The Australian dollar awaits domestic employment figures. Here is how to trade the Aussie employment change with AUD/USD.
0.7625 serves as resistance and 0.75 is low support. Here is the chart:
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