The Australian dollar (or so-called aussie) experienced an increase to $0.77 level on Tuesday, following the Reserve Bank of Australia (RBA) decision, to keep benchmark rate unchanged.
RBA meeting on June 2 voted for leaving the Official Cash Rate unchanged what was generally expected as the previous meeting already cut rates to actual 2.00%. The Australian monetary authority stated that it will monitor closely “whether the current stance of policy will most effectively foster sustainable growth and inflation consistent with the target.”
Central bank’s Governor Glenn Stevens added that mining sector and its capital expenditures remain the major issue for the economy to solve. Moreover, he reiterated that depreciation of aussie would help economy.
As for the US dollar, the currency advanced markedly during the previous week and on Monday it got another support from manufacturing data, helping it to reach 0.76 level again. The major issue in the United States remain the first rate-hike timing, as its previous postponement dragged down the dollar.
From the fundamental point of view, we may expect aussie to ease even further as the RBA is interested in its depreciation, while US dollar is gaining on optimism related to latest data in connection with possible September’s liftoff. Nevertheless, this week’s labor data will show if the optimism is justifiable.
From the technical point of view, we can see next resistance level for aussie at $0.7763, or even further at $0.7832, albeit not expected much to be reach in short-term. For the more expected aussie’s bearish pressure we can expect the currency to drop back to $0.7623 or even further to $0.7581, close to 2009 lows.
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