The Australia dollar falls after weak March building approvals

The Australian dollar fell to a 5-month low after weak Australian building approvals were released on Friday.

Building approvals Source: Bloomberg

Australian dollar price

AUD/USD sunk below $0.700 for the first time in 5 months, reaching to a low of $0.6985 after the release of Australia’s March building approvals.

March building approvals

March building approvals fell 15.5%, which was more than the expected number of 14%.

Private sector dwellings. excluding houses rose 0.38% in March, according to the latest figures by the Australian Bureau of Statistics (ABS)

The trend estimates for total dwellings approved fell 0.6% in March, while the seasonally adjusted estimate for private sector houses fell 3.2% in March, according to ABS figures.

The figures showed the trend estimates of the value of total building approved was flat in March, while the value of residential building rose 0.4%.

The seasonally adjusted estimate of the value of total building approved fell 14.4% in March. The value of residential building fell 17.6%, while the value of non-residential building fell 8.7%.

Market cautious ahead of RBA meeting

Weak March building approvals moved AUD/USD on Friday, but to some extend but what the market seems to be focusing on is Australia’s central bank decision on May 7, according to analysts.

The market is pricing in around a 40% chance of a rate cut to 1.25% according to analysts. It comes as the RBA has left the cash rate on hold at 1.50% since mid-August 2016 when it was cut by 25bps.

Analysts view that the market would be pricing in a greater chance of a 25bps easing on Tuesday, if it wasn't just ahead of the federal election on May 18.

However, the RBA has previously stated that the election cycle won't stop them from changing policy if needed.


IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

Please see important Research Disclaimer.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.6 points on EUR/USD
  • Analyse market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Bid
Offer
Updated
Change
Bid
Offer
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.