The G20 summit took place in Bali, Indonesia, on November 2022…
The AUD keeps loosing
Information is not investment advice
The Australian dollar can’t find a way out of the darkness. The AUD has been falling since January 2019 and it seems that the situation only worsens. Let’s see what factors will affect the currency in the middle term.
On May 20, the AUD firmed on the unexpected results of parliamentary elections. However, the rally was limited and the currency continued its downward movement. RBA meeting minutes (May 21) just worsened the situation. Comments by the central bank that the low cash rate is positive for the national economy were not new but this time they were more than just words. And although markets had already expected the rate cut on the June meeting, confirmation from the central bank pulled the currency further down. The meeting is on June 4, risks of the cut are high, what would prevent the plunge?
Before June 4, we don’t anticipate releases of any important economic data that can change the decision of the central bank. As a result, it’s more likely that the RBA will not change its decision and will cut the rate. However, as the rate cut is already priced-in there are high odds that a great fall will not occur.
Any chances that the RBA will not cut the rate? Yes, the decision is not taken. That’s why chances still exist.
On the daily chart of AUD/USD, the pair has been moving towards the lows of January 2016 at 0.6832. The level is crucial for the aussie. If the pair slumps below it, the next support will lie only at 0.6287 – lows of the first quarter of 2009.
The recovery of the pair will be likely if only the pair is able to stick above 0.6952. Until then, any rise below this level will be considered as only a consolidation.
Nevertheless, the Australian dollar depreciates against most of the currencies; it has chances against the GBP.
GBP/AUD began its movement down on May 6. Negative meeting minutes pushed the pair up. The pound/Australian dollar rate showed the volatility of 243 pips but it didn’t turn the downtrend. The pair tested the upper boundary of the trend but rebounded and continued sliding. And although the aussie is weak, the GBP seems to be on worse levels because of the Brexit deal.
The first support is located at 1.8320. A breakthrough will strengthen the downtrend. After the level is broken, bears will lead the pair to the support at 1.8148. The downward trend will be ended as soon as bulls manage to keep the pair above 1.8410.
Making a conclusion, we can say that we can anticipate a further weakness of the Australian dollar in the middle term because of the lack of the economic data and threats of the rate cut. Moreover, US-China trade war puts additional pressure on the risky asset. However, the AUD will be stronger than such currencies as the British pound.
The deafening news shocked the whole world yesterday: the British Queen Elizabeth II died peacefully at the age of 96…
After months of pressure from the White House, Saudi Arabia relented and agreed with other OPEC+ members to increase production.
Last year was tough for the Japanese yen. USDJPY gained more than 30% over 2022, striking above 150 in October. While anticipation of slower Fed rate hikes pulled the pair below the 130 level at the start of 2023, the speculations over the destiny of BOJ’s yield control policy grabbed the attention of the Japanese assets in the middle of January. What lies ahead for traders of the Japanese yen?
Today, at 5:00 pm (GMT +2), the Bank of Canada will publish the Overnight Rate, which represents short-term interest rates, and is pivotal to the overall pricing of the Canadian Dollar in the global markets. Let's look at how the markets are faring ahead of the BoC rates release.
In a call scheduled for January 25, 00:30 am GMT+2, Microsoft will publish the company's earnings for the final quarter of 2022 and comment on the results, projections, and outlook for the nearest future of the company.