Statistics on the labor market in Australia have disappointed investors. The unemployment rate in January increased to a record for the last 10-year level of 6.0%. Previous figure was 5.8%, the growth was expected up to 5.9%.
The reason of job cuts was the firing of thousands of workers involved in the mining sector of economy. In addition, many international companies such as Toyota, Ford and General Motors plan to shut down production in the country. Reserve Bank of Australia attempts to weaken the Australian dollar has led to a reduction of the interest rate to 2.5%, but economy shows no signs of strong economic growth.
We expect that the RBA will keep loose monetary policy in order to devalue the national currency and support non-mining sector. We remain a long-term negative outlook for the Australian dollar. The signal to open short positions will be fixing of price below the level of 0.89. The target price in case of reduction will be the level 0.87. At the moment, growth is limited by the level of 0.90.
Wish you the profits!
FXFINPRO Capital Analytical department.