submitted by Maxvelgus to Finance_analytics [link] [comments]
Fundamental Australian dollar forecast for today
Are the AUD/USD growth drivers exhausted?In the second quarter, the Australian economy encountered the deepest downturn since the records started in 1959. Australia’s GDP contracted by 7% Q-o-Q and by 6.3% Y-o-Y. The RBA cut the interest rate to the record lo. The central bank has also bought AU$60 since March amid the QE program. The Aussie should have dropped in value, but the AUD/USD rate has been 32% up since the low hit in March. Doesn’t the major rule of the fundamental analysis “strong economy – strong currency” work here? Now, it perfectly works! The matter is that everything is relative in Forex!
A drop by 6.3% in Australian growth is nothing compared to the US GDP contraction by 32%. AUS$60 billion is very little compared with the trillions of dollars in the USA. In Australia, there are less than 30,000 of coronavirus cases, while there are more than six million of COVID-19 cases in the USA. Australia has managed the pandemic better than many other advanced economies, the economy is not critically weak, the RBA yield control policy allows it not to waste the monetary tools. Besides, China supports Australia’s foreign trade.
Dynamics of RBA interest rate and the Australian dollar exchange rate
China is the largest market for Australian exports. Although the diplomatic relations between the two countries are tense, after Canberra accused China of COVID-19 laboratory origins, the trade relations are good. Since the beginning of the year, Australia’s exports to China have increased by 75% compared to the same period in 2016, when the last official meeting of the countries’ leaders took place. The core of the China-Australia trade is iron ore. Over the past twelve months, China has imported 700 million tons of iron ore from Australia. It is twice as much as it was in 2010 when the diplomatic relations between Australia and China were much better.
Chinese imports from Australia
Therefore, the AUD/USD uptrend is strong for several reasons. Australia’s economy is stronger compared to others, China supports Australia’s foreign trade, the Fed’s monetary expansion is unprecedented, which weakens the US dollar. The matter is whether the major bullish drivers have exhausted? Will the Aussie continue its rally?
The analysts polled by Reuters believe the AUD/USD uptrend should slow down. The see the pair trading at 0.72 in one and three months. In six and twelve months, the exchange rate will be at 0.73 and 0.74, accordingly. These levels are close to the current one, which suggests a long consolidation period. In my opinion, it is still relevant to buy the Aussie. China has averted a new round of trade war with the US. The Australian government is working on the income tax reduction bill, which should support GDP growth. The greenback’s’ long-term outlook remains bearish. So, I recommend entering the AUD/USD longs if Australia’s job report for August is positive. The middle-term targets are at 0.75 and 0.763.
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US-Dollar-Index (DXY, USDX) mit aktuellem Kurs und News. Der USD-Index ist ein Währungskorb, der den Greenback gegen sechs Währungen ins Verhältnis setzt. Forex Today: Dollar remains strong, US coronavirus-related news may weigh NEWS Nov 11, 20:28 GMT By FXStreet Team. Here is what you need to know on Thursday, November 12: Volatility kept ... Umfassende Informationen über den US-Dollar-Index. Ausführlichere Informationen finden Sie in den unterschiedlichen Abschnitten dieser Seite wie etwa historische Daten, technische Analysen usw. Der US-Dollar-Index, der den Wert des US-Dollars gegenüber einem ausgewählten Währungskorb aus sechs Währungen vergleicht, kletterte gegen 6.43 Uhr um 0,36 Prozent auf 93,90 Indexpunkte. The US dollar is on the defensive today as a wave of GBP buying spreads after the UK said it won't walk away from Brexit talks. The dollar was strong bid yesterday and this is a quick unwind. US-Dollar(USD) Zu Euro(EUR) Dies ist die Seite des US-Dollar (USD) zu Euro (EUR) Konvertierung, unten können Sie die aktuelle Wechselkurs zwischen sie zu finden und wird alle 1 Minuten aktualisiert. Es zeigt den Wechselkurs der beiden Währungen Konvertierung. Source: Tradingview, FOREX.com. Going into the election results this evening, it’s not a surprise US Dollar pairs are at mid-range or at resistance. These pairs may not have much more upside as the evening approaches. Traders may square up positions heading into the results release, if they aren’t already.
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