Following steady growth in the last few months, yesterday the pair AUD/USD fell from the highs of 0.7250.

Yesterday’s comments of the Oil Ministries of Saudi Arabia and Iran that the reduction of oil production is unlikely in the near future, oil prices and shares in the sector of oil and gas fell down. The decline in oil prices triggered the decrease of the price of commodities. The decline had a negative impact on the commodity currencies, such as CAD, NZD and AUD. Today, the pair AUD/USD continued to decline after the release of poor data on wages growth in Australia in Q4 2015. Increasing unemployment rate prevents demands of people to raise wages. In January, unemployment rate in Australia rose to 6% against 5.8% a month earlier.

According to statistics release this morning, index of wages in Australia amounted to 0.5% in Q4 against the forecast of 0.6% and 0.6% in Q3.

Price pressure in Australia is weakening. Annual inflation growth in January was only 0.4%. The decline in prices of oil and commodities puts pressure on the shares of the oil and gas sectors and mining industry of Australia, which in its turn, have a negative impact on the Australian stock market and AUD.

On Thursday (02:30 GMT+2)) the data on capital investments in Q4 9 will be released. It is expected that capital investments will reduce to -3.0%, especially in the mining industry of Australia.

At the end of last week representative of RBA John Edwards said that exchange rate of Australian dollar is too high and he personally would like it to be at the level 0.6500.

All the above mentioned reasons show that RBA will reduce interest rate from 2.0% to 1.5% in order to support economy. If it does not happen at the meeting of RBA on 2 March, the Central Bank will lower the rates later, at least twice in May and July.

Australian economy is based on exports which require cheap national currency. Therefore, it is possible that the pair AUD/USD has already reached the local highs as part of the upward correction and the pair will resume decline.

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