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Home / Analytics / Forex analysis & forecasts / Forex Fundamental analysis / The Australian Dollar is retreating. Overview for 05.04.2016
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The Australian Dollar is retreating. Overview for 05.04.2016

05.04.2016
The AUD/USD pair is trading downwards for the third consecutive session; the market takes into account neutral decisions by the RBA.

The Australian Dollar is falling on Tuesday. The AUD/USD pair is being sold for three trading sessions in a row and this situation may yet continue. The current quote for the instrument is 0.7565.

Today another meeting of the RBA was over. The decision to leave the interest rate at a level of 2% was expected by the market, so investors’ reaction was quite restrained. However, in the comments the RBA said that the rate may be decreased if the inflation remains as low as now. The situation with the inflation in Australia is as complicated as in any other advanced economy, which encounters the low domestic demand and the insignificant improvement of the external background. According to the RBA’s estimates, in the next following years, the inflation in Australia will remain low. Consequently, it creates risks for future revision of the rate.

History shows that in 9 cases out of a 10 the RBA acts preventively when it comes to the interest rate. It appears that really there are few issues for concern so far.

The regulator is still worried by the situation with the pervious strengthening of the Australian Dollar. The maintaining factors are motivating policies in other economies and the latest growth of commodity prices. These factors can hardly be controlled, so the RBA will have to take its own measures if they want to restrict influence of the external background on the national currency.

For capital markets, there is nothing new in the RBA’s aggressive rhetoric concerning the Aussie’s behavior, but the AUD hardly ever responds to such comments. It looks like right now several catalysts appeared at the same time, and this is the reason why the Aussie is retreating.
 
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