Albeit expected by many, the Reserve Bank of Australia (RBA) left the key interest rate unchanged and fired the Australian currency to $0.77 level.
As the official RBA statement informed, we may expect further rate-cuts during next months to support sustainable growth in demand and inflation to reach the target.
Markets count on such moves mostly due to considerable drop in iron ore prices, one of the major exporting resources from the island's economy. "The Australian dollar has declined noticeably against a rising US dollar over the past year, though less so against a basket of currencies. Further depreciation seems likely, particularly given the significant declines in key commodity prices," RBA Governor Glenn Stevens added in a statement.
We expect further declines from a long-term perspective, albeit the currency pair may be supported by short-term spikes due to worse data coming from the United States, undermining the US currency.
From technical point of view, bears may put their TP on $0.7549, while stronger bullish resistance may be seen on $0.7820.
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