Economic news (2 April 2013)-The Australian dollar rose against most of its major counterparts, including the greenback, after the Reserve Bank of Australia left the cash rate unchanged at 3% on Tuesday, as was widely expected by economists.
The Aussie was trading at $1.0459, up 0.32% at the time of writing, having picked at $1.0479 in earlier Tuesday trading hours.
The overnight cash rate has been 3% since December, a record low for Australia; however, it is still one of the highest rates among the developed countries.
RBA Governor Glenn Stevens said in a statement after the meeting that global forecasts for growth are ‘’little below average for a time, but the downside risks appear to be reduced.”
Policy makers also stated that ‘’inflation outlook, as assessed at present, would afford scope to ease policy further, should that be necessary to support demand’’.
Australian economic data has shown signs of the economy stabilising recently. This was further supported by a report by the IMF, saying that international central banks have increased their currency reserves in Australian and Canadian dollars, and reduced the holdings in US dollars and Japanese yen. It is noteworthy that both Australia and Canada have managed to keep their AAA credit ratings while many developed countries, such as Japan, the US and most of the Eurozone, were downgraded.
Looking further in the week, the Australian Bureau of Statistics is due to release the Trade balance for February on Wednesday, with the country’s February Retail sales following on Thursday.
At yesterday’s session, the Aussie climbed from 1.0380 to 1.0425 USD. This morning the currency pair was trading at 1.0425-1.0475.
Should the Australian dollar successfully overcome the resistance zone at 1.0475-1.0500, its aim will be reaching and testing the zone at 1.0515-1.0545. If successful, the upward trend will continue to 1.0565-1.0600. If it falls below the support at 1.045-1.0430, the next one is expected to be at 1.0405-1.0380. In case of a breakdown, the downward trend will continue to 1.0350-1.0325.
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