Forex - AUD/USD lower despite dwindling rate cut bets

Published 03/21/2013, 10:24 PM
Updated 03/21/2013, 10:25 PM
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Investing.com - The Australian dollar is trading lower against its U.S. rival in Asia on Friday despite traders reducing bets that the Reserve Bank of Australia will not lower rates when it meets in early April.

In Asian trading, AUD/USD is lower by 0.11% at 1.0430. The pair was likely to find support at 1.0344, the low of March 18 and resistance at 1.0405, Wednesday's low. The Aussie struggled a bit against the greenback on Thursday as well despite some data points that should have been supportive.

Data showed that China’s HSBC purchasing managers' index rose to 51.7 in March from 50.4 in February, indicating that the recovery in the world’s second largest economy is still on track. China is Australia’s largest trading partner.

Also on Thursday, official data showed that New Zealand's gross domestic product rose 1.5% in the fourth quarter, beating expectations for a 0.9% rise, after a expansion of 0.2% in the previous quarter.

Today, RBA Assistant Governor Edey will speak in Melbourne at 12:45 p.m. local time while Governor Glenn Stevens is slated to speak in Melbourne on March 26.

Most of Australia’s recent economic data points, including the February employment report, have been strong and indicate the previous spate of RBA rate cuts are starting to have a positive impact on the world’s 12th-largest economy.

From late 2011 through the end of last year, the central bank pared Australia’s overnight cash rate by 175 basis points to 3%. Some RBA deputy governors have recently made comments that give traders reason to believe interest rate adjustments are on hold for the foreseeable future and the solid data only affirms that notion.

Elsewhere, EUR/AUD rose 0.27% to 1.2388 while AUD/JPY fell 0.11% to 98.99. AUD/NZD is down 0.23% at 1.2528.


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