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May 7, 2013
Forex Flash: AUD/USD approaching lower limit of consolidation range - DBS Group
FXstreet.com (Barcelona) - DBS Group analysts note that the Australian dollar is approaching the lower limit of its consolidation range established mostly between 1.0150 and 1.0600 since mid-2012.
They note that like the ECB, the Reserve Bank of Australia (RBA) has cut its cash target rate to a new record low below the present 3.00%. They write, “While consensus didn´t expect a rate cut at the RBA meeting, close attention was also paid to the RBA statement. Apart from its outlook on China and Asia, there will particular interest on its assessment regarding any fiscal drag on the Australian economy. PM Julia Gillard recently reported that an AUD12 bn shortfall in the budget. To safeguard the country’s triple-A debt rating, Gillard ruled out more government spending ahead of the September federal elections. The Treasury is scheduled to announce its Federal Budget next week.”
They note that like the ECB, the Reserve Bank of Australia (RBA) has cut its cash target rate to a new record low below the present 3.00%. They write, “While consensus didn´t expect a rate cut at the RBA meeting, close attention was also paid to the RBA statement. Apart from its outlook on China and Asia, there will particular interest on its assessment regarding any fiscal drag on the Australian economy. PM Julia Gillard recently reported that an AUD12 bn shortfall in the budget. To safeguard the country’s triple-A debt rating, Gillard ruled out more government spending ahead of the September federal elections. The Treasury is scheduled to announce its Federal Budget next week.”