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AUD/USD: Australian dollar further growth is alarming_ 30/03/2016

Technical analysis and trading recommendations -

In his speech yesterday, Fed Chairman Janet Yellen signaled low probability of increasing rates in the US in April, which caused a decline in the US dollar on world currency markets. Today, with the opening of the trading day the dollar's decline continued. The global economic and financial uncertainty causes the Fed to a slower increase in US interest rates. And investors sell the dollar, expecting a slower increase of the Fed interest rates.

However, the strengthening of the national currency against the US dollar may begin to cause concern among the largest regional central banks. For example, AUD / USD pair rose today to new monthly highs, approaching the levels of a year ago near the 0.7700 mark.

Now, however, signals that the Fed will slow the pace of monetary tightening in the United States, increase expectations lowering rates by the Reserve Bank of Australia, the next meeting is scheduled for 5 April.

From the beginning, the pair AUD / USD strengthened by 12% and increase in the Australian dollar wary central bankers of the country. The high rate of national currency and is not beneficial to exporters Australia and harms the recovery of the Australian economy.

The higher increase in the Australian dollar quotations, the greater will be the pressure on the RBA's lead in deciding to reduce interest rates in Australia. Another question - to cause a lowering of the rates decrease in the Australian dollar quotations? Australia's economy continues to recover steadily, as international oil prices and commodity prices are near the bottom, and their further significant decline is in question.

According to some economists, the decline in interest rates in Australia may only temporarily reduce the pair AUD / USD on a background of softer Fed's position in relation to the US monetary policy. For example, according to the forecast The Commonwealth Bank of Australia, the pair AUD / USD by the end of 2016 will be traded at 0.7800, not 0.7000, as previously assumed, but by the middle of 2017 the pair will reach 0.8000, and not 0.7250.

A pair AUD / USD in the current environment will be able to expand or significantly adjusted downward its growth a more rigid position on Fed monetary policy in the United States. Meanwhile, the Fed is inclined to hold a milder policy than stated earlier.

If Friday's data from the US NFP for March will be worse than forecast (205 000 new jobs), the position bears on the US dollar strengthened considerably.

Wednesday, 30 Mar, 2016 / 12:29

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