The Australian Dollar (AUD) held steady following on from yesterday’s decision by the Reserve Bank of Australia (RBA) to keep interest rates on hold at a record low level of 2.00%. The announcement was in line with expectations and the accompanying speech did little to move the currency, however; there is increasing expectations from economists that there will be a Melbourne Cup day cut in November, potentially causing the AUD to tumble by between one to two percent across the currency board overnight.
Today the Australian economy will release it’s Gross Domestic Product (GDP) figure at 11:30 AEST. The quarterly and annualised Australian GDP is forecast to retract from the previous reading of 0.9% to 0.4% and 2.3% to 2.2%. The expected decrease to the GDP figure is testament to the current bearish outlook of the Australian economy and could prove to continue to weigh down on the Dollar (AUD).
The local data releases continue tomorrow, with the Australian Trade Balance and Retail Sales figures being announced. The whopping trade balance deficit of imports outweighing exports to the tune of -2.93B is expected to increase, taking the Trade balance to -3.1B. Retail Sales growth for the month of July is forecast to fall from 0.7% to 0.3%.
With the three key Australian economic indicators scheduled for release this week expected to worsen from the previous month, the Australian Dollar (AUD) appears vulnerable to even further declines. The ‘Aussie’ (AUD) is going to have to rely on better than expected domestic data results in order to experience some positive movement over the next 48 hours.
Australian Dollar to Canadian Dollar (AUD/CAD) Exchange Rate Hits 2 Year Low
The AUD/CAD exchange has been very range-bound over the past 6 months, trading within a 3-4 cent range of between 0.9408 and 0.9747. That range broke to the downside earlier this week as the Canadian Dollar (CAD) was bolstered by oil having its’ biggest 3 day movement in 25 years and better than expected Canadian GDP figures, pushing the AUD-CAD as to a two year low at 0.9243.
Last night the Gross Domestic Product (GDP) was released out of the Canadian economy and the result outperformed expectations, causing the AUD-CAD exchange rate for fall by a full percent before recovering some ground. Canadian GDP is expected to surge in the third and fourth quarter of the year, weighing down on the AUD-CAD exchange rate.
Tomorrow’s Australian economic data and Canada’s employment figures later in the week should keep the AUD-CAD volatile for the next few days. The Canadian Unemployment Rate is forecast to remain unchanged at 6.8%, with an expected 5,000 jobs erased from the economy for the month of August.
The AUD/CAD is currently trading at 0.9300 at 0900 AEST.