2016-08-01 15:35:25

According to data released last Friday, US GDP has grown by 1.2% in Q2 with the adjustment for the season, which is below the forecast of +2.6%. This news caused the decline in the USD last Friday and continues to put pressure on the USD this Monday. Average annual GDP growth has been the weakest since 1949.

Investors’ expectation of the interest rate hike in the USA has declined. Now it is likely that the US interest rates will be raised by 0.25% in December.

This Monday Australian dollar has reached two-week highs in the pair AUD/USD, but then fell on weak Chinese data. China is the largest trading partner of Australia and a buyer of the Australian commodities.

Purchasing managers index (PMI) in China fell below 50 in July, indicating the decline in activity in the manufacturing sector of the country, for the first time in five months. TD Securities data on the Australian inflation was also unfavourable for the AUD, as it showed that inflation in Australia fell by 0.3% in July.

Tomorrow at 06:30 (GMT+2) interest rate decision by the RBA will become known. It is expected that the rate be lowered by 0.25% to 1.50%.

According to Australian Bureau of Statistics, inflation in Australia has grown by 0.5% in Q2 and by 1.7% on annual basis, against the forecast of 0.4% and 0.2% in Q1. Consumer price index rose by 0.4% in Q2 compared to the previous quarter and by 1.0% compared to the same period last year.

If the RBA does not lower interest rate, the AUD will rise in the market and in the pair AUD/USD.

US statistics is scheduled for release today (16:00 GMT+2), including ISM business activity index in the manufacturing sector and index of inflation acceleration for July. In case of the positive data the USD will go up.

AUD/USD: Decisions by the RBA can be a surprise for the market.  Fundamental analysis for 01.08.2016