AUD/USD extends losses as RBA's SoMP cuts GDP forecasts


  • AUD/USD downside gathers steam as RBA cut GDP forecasts. 
  • The central bank expects jobless rate to remain at 5.1% till December 2020.
  • Policy to remain accommodative for some time and more easing may be required if the jobless rate rises, the SoMP said. 

The bearish pressures around the Australian dollar strengthened, pushing the AUD/USD pair to fresh session lows near 0.6715 after the RBA's Statement of Monetary Policy (SoMP) cut growth forecasts and said the policy is expected to remain accommodative for some time.

Cuts GDP forecasts

The RBA has revised lower the GDP forecast for Q4, 2019 to 2% from the previous forecast of 2.3%. The growth forecast for June 2020 quarter has been revised lower to 1.9% from 2.6%. Meanwhile, the growth rate is seen rebounding to 3% by December 3%. 

The central bank expects trimmed mean inflation to rise to 2% by June 2022 and sees jobless rate remaining steady at 5.1% this year and falling to 4.9% in December
2021. 

The SoMP mentioned that its forecasts are based on the technical assumption of one 25 bps rate cut in mid-2020.

The AUD/USD pair, which was already trading on the defensive near 0.6725, extended losses to 0.6715 following the SoMP. 

The currency pair may slide further to recent lows near 0.6680, as the SoMP said that risk might shift in favor of more easing if the unemployment rate were to be "moving materially higher" and if there was no further progress being made on lifting inflation. 

Moreover, governor Lowe was out on the wires earlier today, stating that the negative impact of the coronavirus outbreak on the Australian economy could be far bigger than the SARS episode of 2002-2003.

Technical levels

AUD/USD

Overview
Today last price 0.6716
Today Daily Change -0.0013
Today Daily Change % -0.19
Today daily open 0.6729
 
Trends
Daily SMA20 0.681
Daily SMA50 0.6861
Daily SMA100 0.6833
Daily SMA200 0.6865
 
Levels
Previous Daily High 0.6765
Previous Daily Low 0.6727
Previous Weekly High 0.6829
Previous Weekly Low 0.6682
Previous Monthly High 0.704
Previous Monthly Low 0.6682
Daily Fibonacci 38.2% 0.6742
Daily Fibonacci 61.8% 0.675
Daily Pivot Point S1 0.6716
Daily Pivot Point S2 0.6702
Daily Pivot Point S3 0.6678
Daily Pivot Point R1 0.6754
Daily Pivot Point R2 0.6778
Daily Pivot Point R3 0.6792

 

 

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