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Aussie lower in the morning part of the session

Friday, May 08 2015
Aussie was pushed below 0.79 handle in the morning part of the session as the central bank cut its outlook for inflation and growth, suggesting there may be further room to ease the cash rate from a record low 2%, at least according to the Monetary Policy Statement.
 
In the statement, it was said that some higher-cost producers in Australia are responding to the lower prices by curtailing production. At current prices, however, most Australian production appears to be profitable. So far, the response from higher-cost producers elsewhere, including in China, has been less than expected given that many are estimated to be unprofitable. 
 
It was noted that interest rates on the stock of housing and business loans have declined in response to the February and May cash rate reductions and lower money market interest rates over the past three months. Growth in housing lending continues to be driven by lending to investors, while growth in business financing has picked up over the year. Australian equity prices have declined over recent months. 
 
Pair is currently being traded few point above 0.7880 level. It is likely to find support at 0.78 handle and resistance above 0.7950 area. Later today, in the US session, NFP figures are scheduled for a release.
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