This Tuesday two important data sets are coming out in Australia – international trade balance and interest rate decision by RBA. Both might potentially define the exchange rate dynamics of AUD for the rest of August.
It is not very difficult to predict with great degree of confidence what the rate decision will be – the rate interests will remain the same, while accompanying rhetoric might be intent to forestall the further appreciation of AUD against its counterparts. This task will not be hard to achieve – Australian economy is notoriously running trade deficits, exacerbated by falling prices for gold and relatively high prices for oil. For the economy with commodity oriented exports such a combination is sure recipe for trade deficits.
Thus, the Australian currency is under pressure from trade deficit and policy of RBA. It seems that for the coming month AUD is capped from the upside at around 0.94, with more room for a fall.
It is not very difficult to predict with great degree of confidence what the rate decision will be – the rate interests will remain the same, while accompanying rhetoric might be intent to forestall the further appreciation of AUD against its counterparts. This task will not be hard to achieve – Australian economy is notoriously running trade deficits, exacerbated by falling prices for gold and relatively high prices for oil. For the economy with commodity oriented exports such a combination is sure recipe for trade deficits.
Thus, the Australian currency is under pressure from trade deficit and policy of RBA. It seems that for the coming month AUD is capped from the upside at around 0.94, with more room for a fall.
