Australian Dollar finds support at 1.0425 - 5th August, Forex Update

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by: fxsolutions
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Date: Mon, 22 Aug 2011 Time: 8:32 AM
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Chris Advincula, Chief Market Analyst at FX Solutions (http://www.fxsolutions.com/), provides forex traders with an overview of currency market activity and news on 5th August 2011, including news of a new support level for the Australian Dollar.

"After the Australian Dollar fell 275 points from 1.0700 yesterday to 1.0425, the currency pair finally appears to have taken hold after the steep 2.5 percent drop following the stock market free fall yesterday where the European stock markets closed drastically lower by as much as 5 percent.

Today, the Reserve Bank of Australia's Monetary Policy report lowered its forecast for economic growth this year and raised the outlook for inflation. The growth forecast in 2011 will average 2 percent, revised from the original estimate of 3.25 percent last May.

Consumer Prices will rise 3.5 percent in the year, from the original estimate of 3.25%. Core inflation was reset to 3.25% from 3%. The underlying inflation will remain "relatively high" in 2012 and 2013 according to the RBA report.

The rebound on the rates was also covering off short positions and the result of a weaker yen on BOJ intervention.

The 21-day exponential moving average eased marginally from 1.0480 to 1.0455."

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