AUD/USD: RBA cuts key interest rate to 0.5%

AUD/USD: RBA cuts key interest rate to 0.5%

AUDUSD

AUDUSD Movement

For the 24 hours to 23:00 GMT, the AUD declined 5.24% against the USD and closed at 0.6542.

LME Copper prices rose 1.2% or $67.0/MT to $5,640.0/MT. Aluminium prices climbed 1.3% or $21.5/MT to $1,684.5/MT.

In the Asian session, at GMT0400, the pair is trading at 0.6548, with the AUD trading 0.09% higher against the USD from yesterday’s close.

Overnight data showed that in Australia, new home sales rose 5.7% on a monthly basis in January, compared to 2.0% in the previous month. On the other hand, current account surplus narrowed to A$1.0 billion in 4Q19, compared to a revised surplus of A$6.5 billion in the previous quarter. Additionally, building permits plunged 15.3% on a monthly basis in January, compared to a revised increase of 3.9% in the prior month.

In a major economic news, the Reserve Bank of Australia (RBA), in its policy meeting, slashed its benchmark interest rate to a new record low of 0.5%, citing coronavirus concerns. Meanwhile, the RBA Governor, Philip Lowe, reiterated that the central bank is prepared to ease monetary policy further to support the Australian economy.

Separately, the Organisation for Economic Cooperation and Development (OECD) lowered Australia’s growth forecast to 1.8% this year and slashed China’s growth forecast to 4.9% from 5.7%.

The pair is expected to find support at 0.6516, and a fall through could take it to the next support level of 0.6484. The pair is expected to find its first resistance at 0.6574, and a rise through could take it to the next resistance level of 0.6600.

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Moving ahead, investors would focus on Australia’s Commonwealth Bank services PMI and AiG Performance of Construction Index, both for February as well as gross domestic product data for 4Q 2019, slated to release overnight.

The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.

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