Tony’s Market Blog – 7 June 2017

As expected,  Australia’s Q1 GDP growth slowed to 0.3% or 1.7% annualised, well below the previous quarters 1.1% read & 2.4% annualised level.

The contraction was due to the after effects of Cyclone Debbie in Queensland, sluggish retail sales, higher home loan interest rates, record household debt’, a low inflationary environment and a 50% fall in the price of iron ore over the past 6 months.

The RBA remains on hold with interest rates this year after reiterating its neutral stance, meaning the chance of a rate cut is the same as a rate hike for the next period ahead.

The Aussie Dollar has benefitted from a weaker US$ and the fact that it has avoided a recession for 26 years! A break above the 200 day moving average of 0.7530 now open s the way for a re-test of 0.7640 resistance level in coming days.

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Have a great day!

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Tony Boyadjian

Senior Vice President,  Foreign Exchange

 

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