The Australian dollar managed to strengthen its positions against the US dollar after the decision of the Reserve Bank of Australia to leave the key interest rate unchanged. However, there are a number of points that indicate a tightening of the conditions in the short-term financing markets in U.S. dollars.
Based on today's decision, the Reserve Bank of Australia, the right bank of Australia. Despite this, a number of commercial banks have resorted to increasing the cost of short-term financing, which also led to an increase in mortgage rates.
The RBA also predicts further progress in reducing unemployment, as leading indicators indicate a strong increase in employment. Despite this, the regulator expects that the growth of salaries, which will most likely remain low for some time.
As for economic forecasts, experts in the RBA continue to presume a faster growth of GDP this year, which will lead to a gradual return of inflation to the target level in the future.
As for the technical picture of AUD/USD pair, there are still no major changes. The small short-term growth of the Australian dollar is likely to be temporary, as the US-China trade war that is only gaining momentum, could negatively affect the Australian economy.
To speak about short positions in the AUD/USD pair, it is best after correction to the area of resistance 0.7750 and 0.7780. A breakthrough in current support levels in the area of 0.7640 will lead to another wave of sales in the trading instrument with an output to new lows of 0.7560 and 0.7500.
Yesterday it became known that the US and China could not negotiate on trade duties, although last week there were clear "glimpses" in the negotiations. The Chinese authorities imposed duties on the import of a number of goods from the United States, claiming retaliatory measures after the administration of Donald Trump imposed duties on the supply of steel and aluminum from China. As noted in the report of the Ministry of Finance of China, duties increased by 25% of the tariff for American pork and a number of other commodity items, as well as 15% of the tariff for fruits and 120 commodities from the US.
As a result of such protectionist measures, investors once again turned their attention to gold, which yesterday rose strongly in price. Many traders are afraid of a more protracted trade war between the US and China, as well as, the fact that there are a number of retaliatory measures with all the consequences, from the European Union. This will necessarily lead to an increase in the costs of manufacturing companies and adversely affect the growth rate of the economy.
