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Additionally, Treasurer Hockey stuck to his plan of eliminating the cash deficit over the next 5 years. Ratings agencies said the new forecasts mean the AAA rating isn’t under threat. The implications of the RBA and monetary policy are still unclear to an extent but it seems analysts are satisfied because the government has not necessarily attempted to offset lower receipts by slashing spending.
For now, though, it’s anticipated the budget will have limited impact on the RBA. With that in mind, AUD/USD is knocking on $0.8000 and looks like it could break this barrier in the near term. We had already seen a similar move following the last RBA meeting.
The pair is currently testing a downtrend resistance line that has been in place since September last year. A close above $0.8000 would see this downtrend broken and could trigger a run to late April highs of $0.8076. We have a raft of releases out of China today that could drive some volatility for the pair.