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Australian economy affected by the downtrend in mining industry

Friday, Mar 20 2015
This morning RBA released its quarterly bulleting. In it RBA noted that the latest slowdown in the Chinese property market has coincided with a pronounced increase in property developer leverage. Also, fall in commodity prices is still a great issue. The price of iron ore fell below $US55 a tonne for the first time since 2009 as concerns about an oversupplied market as big miners lift production and waning Chinese demand weighed.
 
Reserve Bank governor Glenn Stevens said he believes Australia will survive the winding down of the mining investment boom without a serious downturn, but we will need to do things such as invest in quality public infrastructure to give us the “best chance” of doing so.Speaking at the American Chamber of Commerce in Australia on Friday, Mr Stevens said the global backdrop was less supportive to Australia than it had been some years ago, with falling terms of trade and declining mining investment having a negative effect on incomes and government revenues.
 
Aussie is currently being traded few points above 0.7660 area. Pair is likely to find support around 0.76 and resistance above 0.77 handle. There will be no major data releases in the rest of the session so we can expect steadier rest of the day.
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