Australian currency declined against all of its 16 major counterparts.
The Reserve Bank of Australia left its cash rate intact at 4.25%, coming up with expectations. However, according to the chairman Glenn Stevens, the RBA board decided to see forthcoming key data on prices to reassess its outlook for inflation, before considering a further step to ease monetary policy.
The release of the first-quarter CPI is scheduled on April 24 (5:30 GMT). According to the Melbourne Institute, the nation’s consumer prices rose 1.8% last month from a year earlier, the slowest pace since October 2009.
United Overseas Bank: The tone of the RBA’s statement was quite dovish. Interest-rate expectations are going to fall; this will continue to weigh on the Aussie.
Moreover, retail sales rose 0.2% in February, below the forecasts and the January print, both at 0.3%.
In addition, on May 10 (10:30 GMT) the annual budget release is expected. Prime Minister Julia Gillard said today the government will deliver a “tough budget”, when the Treasury presents a spending plan for the coming fiscal year.
Societe Generale: If the signal from the budget is deep fiscal cuts, there is no option for the RBA but to ease monetary policy to accommodate tighter fiscal conditions.
On the other hand, China, Australia’s biggest trading partner, posted upbeat figures today. China’s non-manufacturing PMI climbed to 58.0 in March from 57.3 in February.
AUD/USD is currently trading around $1.0380, below the 50-, 100- and 200-day MA. Most analysts forecast the bearish pressure on the Aussie to continue. The support for the currency pair lies at $1.0370, $1.0355, $1.0335, $1.0305 (local minimum) and $1.0260, whereas the resistance – at $1.0415, $1.0450, $1.0485, $1.0510 and $1.0600.
Chart. Daily AUD/USD