2016-08-12 12:53:39

The Minister of Energy of Qatar, Mohammed bin Saleh Al-Garden said Monday that OPEC might hold an informal meeting on September 26-28 at the international energy forum in Algeria. A statement by Khalid al-falikha, the Minister of Energy of Saudi Arabia that Saudi Arabia intends to cooperate with other oil producing countries in order to stabilize oil prices, has caused the rise in oil prices by 4%. The price of crude oil WTI and Brent has grown to three-week highs.

Commodity currencies, including the CAD and AUD received support from the rising oil prices. Oil and gas sector is an important item of the Australian exports.

Earlier this week, the RBNZ lowered interest rate by 0.25% to 2.0% and indicated that more monetary easing in the country is possible. In response to this decision, the New Zealand dollar sharply rose in the market. The pair AUD/USD has also grown by almost 50 points on the decision by the RBNZ. Economies of Australia and New Zealand are closely interrelated and both are focused on exports. Main items of exports in both countries are raw materials and agricultural products.

On the other hand, the USD fell on Wednesday against major currencies, as expectations of the interest rate increase in the USA has decreased after the release of weak data on the US labor productivity in Q2 on Tuesday. This was the strongest decline of labor productivity since 1979 and this fact will not allow the Fed to increase interest rate in September.

Low interest rate reduces investment attractiveness of the USD and has a positive impact on the price of commodities and commodity currencies such as Canadian, Australian and New Zealand dollars.

The Australian dollar is traded at the highest levels since the end of April, receiving support from the strong stock market of Australia and stable price for iron ore, one of the main items of Australian exports.

Last week, the RBA has issued the forecast, which showed that inflation will not reach the target range of 2% -3% until December 2018.

Low inflation rate will influence on the interest rate decision by the RBA. Although the Central Bank of Australia has already lowered interest rate to the record lows of 1.5% earlier this month, many economists expect further rate cut, which will prevent the rise in the Australian dollar.

Taking into account expectations of the rate hike by the US Fed at the end of the year, it is advisable to be careful when opening long positions in the pair AUD/USD.

AUD/USD: The rise in oil prices support the AUD  Fundamental analysis for 12.08.2016