All trading involves risk. Losses can exceed deposits.

Aussie dips ahead of rate decision

The Aussie is a touch lower versus the US dollar ahead of the interest rate decision tonight.

All trading involves risk. Losses can exceed deposits.

The AUD/USD is trading at $0.9231, down 0.2%, as traders secure their profits from the end of last week’s gains. For the year-to-date, the Australian dollar is up 3.8% against the US dollar. As  Evan Lucas stated, the Reserve Bank of Australia (RBA) has shifted its viewpoint from easing its monetary policy to a more neutral stance.

Last year the RBA cut interest rates to an all-time low of 2.5%. The governor, Glenn Stevens, has decided to wait and see, holding off further interest rate reductions until he sees additional signs of a slowdown. Last week Mr Stevens stated Australia could be in for a property boom given the low interest rates and a strong construction sector would help Australia reduce its dependence to importing Chinese minerals.

The RBA is likely to keep interest rates unchanged. If Mr Stevens retains his neutral stance in his statement, we could see the Australian dollar test the $0.93 mark. The Aussie is finding support at the 100-period moving average of $0.9226.

Spot FX AUD/USD chart

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. 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. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.