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Aussie lower due to fall in commodity prices

Friday, Dec 11 2015
Aussie fell this morning due to continued falls in commodities. What holds it higher is better than expected labor market data released on Thursday showing Australia's unemployment at its lowest level since April 2014 spiked the Aussie to trade above 73 U.S cents on consensus the Reserve Bank of Australia is unlikely to ease monetary policy. 
 
Also, in Westpac's release this morning it was said that the Treasury will downgrade economic forecasts. Budget deficit for 2015/16 will be revised higher by around $4bn to $39bn (-2.4% of GDP). Deficits for the following years will also be revised higher, for a four year deterioration of $36bn. According to Westpac forecasts will continue to anticipate a gradual narrowing of the deficit to around $19bn (-1.0% of GDP) by 2018/19, instead of the $6.9bn projected currently.
 
The weaker starting position for the budget reflects two factors, first of them being weaker nominal GDP growth centred on lower commodity prices, particularly for iron ore and the second one which includes slower trend growth, reflecting slower population trends.
 
Aussie is currently being traded around 0.7250 area. Pair is likely to find support around 0.72 handle and resistance above 0.7320 level. Later today, in the US session, PPI, Retail Sales and Consumer Sentiment figures are scheduled for a release.
More in this category: « BoE keeps interest rates unchanged German CPI up by 0.1% in November »

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