Australia: GDP justifies three RBA cuts in 2019 - Westpac

Sandeep Kanihama FXStreet Contributor

According to analysts at Westpac, uncertainty has remained rife this week as Australian growth disappointed after the RBA cut rates and US trade tensions persisted.

Key Quotes

“Q1 2019 proved to be a particularly weak quarter for our economy, GDP growth rising just 0.4% and domestic demand weaker still at 0.1%. Over the 12 months to March, GDP growth was a full percentage point below trend at 1.8%, meaning per capita growth over the period was just 0.1%.”

“April retail sales data points to continued weakness in consumer spending in Q2 2019 and hence a good chance of another below-trend read on GDP.”

“The above GDP outcome will come as a surprise to the RBA and mean they will likely have to revise their growth expectations down again from an already below-trend 2.6%yr at May 2019 (to 1 decimal place). Importantly that forecast was predicated on two rate cuts by year end.”

“So with growth having disappointed again and Governor Lowe voicing a need to get the unemployment rate down to at least 4.5% (from 5.2% in April) to bring inflation back to target, we have strong confidence in our expectation that two more cuts will be delivered by year end – in August and November, taking the cash rate down to 0.75%.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

EUR/USD tests nine-day EMA support near 1.1850

EUR/USD inches lower during the Asian hours on Monday, trading around 1.1870 at the time of writing. The 14-day Relative Strength Index momentum indicator at 56 stays above the midline, confirming improving momentum. RSI has cooled from prior overbought readings but stabilizes above 50, suggesting dips could stay limited before buyers reassert control.

GBP/USD flat lines as traders await key UK macro data and FOMC minutes

The GBP/USD pair kicks off a new week on a subdued note and oscillates in a narrow range, just below mid-1.3600s, during the Asian session. Moreover, the mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.

Gold buyers hesitate amid holiday-thinned trading

Gold trades volatile, but within range, as US, China holidays-led thin trading exaggerates moves. The US Dollar extends range play into the US GDP week, with markets pricing at least two Fed rate cuts this year. Technically, Gold tests key support at $5,000; daily RSI still remains bullish.

Top Crypto Losers: Dogecoin, Zcash, Bonk – Meme and Privacy coins under pressure

Meme coins such as Dogecoin and Bonk, alongside the privacy coin Zcash (ZEC), are leading the broader market losses over the last 24 hours. DOGE, ZEC, and BONK ended their three consecutive days of recovery with a sudden decline on Sunday, as crucial resistance levels capped the gains. Technically, the altcoins show downside risk, starting the week under pressure.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.