The fallout from the weak GDP (and also some worrying forecasts about Australia) continues.
The Australian dollar is falling against the US dollar to new 20 month lows. And the fall of the Aussie is not limited to the US dollar.
Australia reported a growth rate of 0.6% on a quarterly basis, or 2.5% on a yearly one, below expectations. In addition, new forecasts regarding the Aussie predict it will fall to 0.92, 0.80 or even 0.70. A bolder forecast made during May by John Taylor talked about 0.60.
Australia’s finance minister Wayne Swan mentioned that the Australian dollar is still at historically high values.
On the other side of the Pacific, the US has reported mediocre figures: ADP Non-Farm Payrolls disappointed with a gain of only 135K payrolls. The ISM Non-Manufacturing PMI (services sector) remained almost unchanged, but the employment component fell, casting worries about job growth.
The US dollar is on the back foot against the euro, yen and British pound. However, it is reached new highs against the Australian and New Zealand dollars, with NZD/USD trading at around 0.7930.
AUD/USD is currently trading at 0.9517, after already reaching a low of 0.9510. This is below the previous bottom of 0.9527. The round number of 0.95 provides support, but the really big support line is 0.9388.
For more lines and analysis, see the Australian dollar forecast.
Live AUDUSD graph:
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