- Aussie traders await GDP data to respond to the latest pessimism surrounding global growth amid on-going US-China trade war.
- Fewer US catalysts are scheduled to observe during the day.
Despite World Bank’s latest warning over global growth and escalating trade tension between the US and China, AUD/USD remains little changed to 0.7000 as traders await first-quarter GDP data for fresh impulse.
The World Bank’s latest report cited trade wars as the reason behind another downgrade of global growth forecast to 2.6% from 2.9% anticipated in January.
Elsewhere, the US Commerce Department showed readiness to arrange for rare earth supplies considering recent threats to halt the line by China/Russia.
At the monetary policy front, RBA’s rate cut and comments from Governor Philip Lowe couldn’t weaken the Australian Dollar (AUD) much as markets had already priced in such actions.
The US monetary policymakers continued emphasizing trade wars as a worrisome reason for future policy moves. Though, Chairman Jerome Powell seemed little dovish than the other leaders during his latest public appearance.
Improvement in global risk sentiment was also cited by the US 10-year treasury yield as they gained nearly 5 basis points to 2.12% recently.
Moving on, Australia’s first quarter (Q1) gross domestic product (GDP) data will be of immediate interest to the Aussie traders followed by comments from the Fed’s Vice Chair and the US numbers like ISM non-manufacturing PMI and Markit composite PMI.
While AU GDP is expected to rise to 0.5% from 0.2% on a quarterly basis, the growth figure may soften to 1.8% from 2.3% on a YoY during Q1 2019. Further, the US ISM non-manufacturing purchasing manager index (PMI) and Markit composite PMI are both likely to remain unchanged at 55.5 and 50.9 respectively.
Technical Analysis
Inability to successfully rise beyond March month low around 0.7000 and cross 50-day simple moving average (SMA) level of 0.7030 could weigh on the quote in case of sluggish data. As a result, chances of witnessing 0.6940 and 0.6900 back to the chart can’t be denied.
Should there be an uptick beyond 0.7030, 100-day SMA surrounding 0.7080 and 0.7100 round-figure might entertain buyers.
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