2016-10-19 11:58:55

At today's Asian session, the AUD was supported by the positive Chinese statistics. It became known that Chinese GDP in Q3 has grown by 1.8% (+6.7% on annual basis), the same as in Q2. Although economic growth in China is slowing down, it is still rapidly developing. China is the largest trading partner of Australia and favourable Chinese macro-economic data has a positive effect on the Australian economy and its currency. However, some concerns about economic growth in China next year still remain.

Thursday at 03:30 GMT+3 Australian employment data for September will be published. It is expected that the number of new jobs will slightly increase; unemployment rate will also grow to 5.7% from 5.6% in August. According to economists, labor market is stable in Australia and the RBA will pay more attention to inflation and risks associated with the real estate market, which still overheated. The RBA will not lower interest rates in the country.

Next Wednesday at 03:30 GMT+3 Inflation data for Q3 will be released.

Consumer price index in Q2 was at the level of 0.4%, which is a very modest figure. CPI is the most important indicator of changes to the consumer trends and the most important inflation indicator, which is taken into account by the RBA for making monetary policy plans.

Central Bank of Australia can make a decision to lower interest rate if inflation data will be worse than expected.

Governor of the RBA Philip Lowe said yesterday that the rate would be lowered if inflation remains low for a long time, situation in the labour market gets worse and the housing market significantly falls. Meanwhile, according to earlier reports, situation in these sectors of the Australian economy is not too bad and the cut of the rate is not expected at the next RBA meeting. This fact encourages buyers of the Australian currency and traders using a strategies “carry-trade”.

At the meeting on October 4, the RBA kept interest rate at the level of 1.5%, which is one of the highest among the countries with the advanced economies. The Australian economy remains one of the most stable in the world.

Many economists expect that the RBA will refrain from changing rates until mid-2017.

This factor will support the Australian dollar in the medium term.

Today’s news is as follows: at 15:30: new homes constructions in the U.S. in September. At 17:00: interest rate decision by the Bank of Canada and the Bank’s comments.

Note that volatility in the market will increase at this time.AUD/USD: Australian inflation data will be released next week.  Fundamental analysis for 19/10/2016