Above: The RBA will not raise interest rates tomorrow says one analyst. Markets aren't so sure though.
The Australian dollar is trading softer on Monday morning as global markets head lower. While broad-based market sentiment is proving unsupportive to the Australian currency there is also the fear that the RBA could cut interest rates tomorrow.
A look at the markets in late morning in London shows:
- The pound sterling to Australian dollar exchange rate is 0.07 pct higher on a day-to-day basis at 1.7314.
- The Australian dollar to sterling exchange rate is thus at 0.5775.
Month-end demand underpins Aus dollar
Ipek Ozkardeskaya at Swissquote Research gives us an insight into recent trade behind the Australian dollar:
"The Aussie opened the week on the downside as the securities inflation accelerated 0.2% m/m versus 0.1% a month ago.
"AUDUSD retreated to 0.9280 in Sydney before bouncing back above 0.9300 on month-end demand. The trend momentum reversed, MACD 12, 26 day indicator stepped in the red zone.
"The global risk-off, uncertainties in Europe and lower PMI in China suggest the sell pressure to remain."
Outlook for the Australian dollar today
"Near-term resistance is at 0.9402, a break above this would open 0.9529. Support is at 0.9211 ahead of 0.9136," says Geoffrey Yu at UBS, commenting on the outlook for the headline Australian dollar vs US dollar exchange rate.
Luc Luyet at MIG Bank says:
"AUD/USD is approaching the 38.2% retrace of the 0.8848 - 0.9529 rise, which lies close to 0.9270. If a break under this region can be achieved, together with a push under 0.9233, then the medium-term bear trend can be
deemed to have been reinstated.
"In the medium-term, the break above the strong resistance at 0.9345 confirms an improving medium-term technical structure.
"However, the long-term technical pattern remains negative thus far. Therefore, we expect the strong resistance at 0.9843 (21/05/2013 high, see also the 200 day moving average) to cap the medium-term upside potential."