The RBA left the interest rate unchanged at 2.50% as widely expected. It also kept on warning about the value of the Aussie.
The meeting met the Aussie already on the back foot, and it fell to a low of 0.9056, just a few pips above the low seen last week, which was the lowest since September, before the NO-taper decision in the US. Can AUD/USD lose 0.90 soon?
The Reserve Bank of Australia said that the value of the Australian dollar remains “uncomfortably high†and that a lower value would likely be needed for the Australian economy.
If a weaker A$ is needed, will Glenn Stevens and co. act to weaken it if it doesn’t happen on its own?
This is how it looks on the charts:
If the current support falls apart, the next line is the round 0.90 level. Beyond this, 0.8930 provides a cushion and multi-year low of 0.8850 are critical support. For more on the Aussie, see the AUD USD forecast.
In addition, Australia released a few other figures: retail sales rose by 0.5%, above 0.4% expected. However, the current account deficit widened to 12.7 billion contrary to 11.1 billion expected. China’s Non-Manufacturing PMI came out at 56, similar to 56.3 seen last month.
Another thing weighing on the Aussie is the plans of Rio Tinto to reduce capital expenditure by around 20%.
There is another major event coming up in Australia this week.
See how to trade the Australian GDP with AUD/USD.
