Topic: COZfx: The NAB expects three rate cuts from the RBA this year
COZforex: For the past trading session, the AUD strengthened 0.33% against the USD to close at 0.7798, rebounding from its previous session losses.
LME Copper prices dropped 0.46% or $26.0/MT to $5666.0/MT. Meanwhile, Aluminium prices dropped 0.88% or $16.5/MT to $1855.0/MT.
Early morning data showed that consumer prices in China, Australia’s biggest trading partner, slipped to a 5-year low of 0.8% on a YoY basis in January, compared to prior month’s level of 1.5%, while markets expected it to decline to 1.0%, thus indicating that the risk of deflation was increasing in the world’s second biggest economy. In addition, the nation’s producer price index eased more than expected by 4.3% on an annual basis in January, against market expectations of 3.8%. It had fallen 3.3% in the preceding month.
In Australia, the NAB indicated that business confidence index climbed to a level of 3.0 in January, following a reading of 2.0 recorded in December, while business conditions remained flat at a level of 2.0 in January. Meanwhile, the nation’s house price index advanced 6.8% on a YoY basis in 4Q 2014, lower than market expected rise of 7.1%. The index had registered a revised level of 9.0% in the prior quarter.
Furthermore, the NAB mentioned that the Australian economy was losing momentum and forecasted that the RBA would go for a second interest rate cut in May.
In technical analysis, COZforex senior currency strategist Ian • Quigley said, AUD/USD is predicted to find support at 0.7776 and a drop through could take it to the next support line of 0.7724. Meanwhile, the pair is predicted to find its first resistance at 0.7863, and a rise through could take it to the next resistance line of 0.7897.
(COZ forex UK)