Fri, May 06 2016, 05:55 GMT SzrnFX
The AUD/USD near fresh nine-week lows of 0.7382, having finally breached 0.74 handle. The Australian dollar remains relentlessly offered versus its American dollar after downward revisions to the Australian inflation and wage growth outlook cast a mantle of doubt over the OZ nation’s economic growth prospects and bolstered calls for further RBA rate cuts in a bid to spur the ailing economy.
“The Reserve Bank of Australia’s new forecast that underlying inflation will remain below the 2-3% target range until the middle of 2018 supports our long-held view that interest rates will be cut again to 1.5% before long,” Capital Economics said in a note to clients.
Overnight, the dollar rose against a basket of currencies for a third day on Thursday as traders closed out profitable bets against the greenback before Friday’s U.S. payrolls report which may confirm the view the Federal Reserve will not raise interest rates soon.
More so, renewed sell-off in the oil prices further exacerbated the pain in the resource-linked Aussie and hence, added to the prevalent risk-off trades in the markets. While wide-spread cautiousness ahead of the US payrolls data, also collaborates to the downbeat sentiment around the AUD/USD pair.