2016-11-02 11:57:36

Following yesterday's rapid growth in the AUD caused by decision of the RBA leave the interest rate unchanged, the Australian dollar has already lost half of the positions against the USD at the beginning of European session on Wednesday.

As expected, yesterday, the RBA left interest rates in Australia unchanged at the level of 1.5%. In the following up comments the RBA said that given available information and after decisions on monetary policy easing at meetings in May and August, the Board of the Bank decided to continue existing policy, which would be beneficial for the economic growth and achievement of the target level of inflation.

Usually, the rise in the commodity prices triggers the rise in the AUD.

According to yesterday’s RBA data the index of prices for raw materials, which is a leading indicator of changes to the export price, has grown by 16% on annual basis in October. Changes to export prices have a strong impact on Australian GDP and the price of the AUD, which is a commodity currency. The Australian economy is export-oriented, and such commodities as liquefied natural gas, coal, iron ore, are the main items of export in Australia.

However, today the pair AUD/USD is declining due to the data showing that construction permits in Australia fell below expectations in September, (-8.7% against the forecast of -3.0% and -1.8% in August).

It seems that housing construction boom in Australia has passed its peak. The decline in construction may indirectly indicate the decline in housing prices. In this case the RBA may continue the policy of the interest rate cut in the country.

We cannot completely exclude possibility of the rate cuts by the Reserve Bank of Australia, although, many economists expect that it may only happen after mid-2017.

Today ‘s news will include US data: at 15:15 (GMT+3) ADP employment rate in October. This data has a strong impact on the market and the price of the USD; however, it has direct correlation with Non-Farm Payrolls. A month ago the rate was at the level of 154 000 employees in the private sector of the United States. The forecast is 165.000.

Attention of the market participants today will be drawn to the Fed's interest rate decision (21:00). It is not expected that the Central Bank will raise interest rates before the presidential election. However, market participants will monitor the rhetoric of the Fed leaders in order to understand future plans of the Central Bank and to pick up the signals about future policy tightening.AUD/USD: The AUD is declining in the market.  Fundamental analysis for 02/11/2016