The Australian dollar continued to be stronger in European deals on Tuesday, as the nation’s treasurer Joe Hockey projected a much narrower budget deficit for 2015-2016 and promised to boost growth and create jobs as the global economy rebounds.
The treasury projects A$35 billion deficit in 2015-16, which is seen to narrow to A$7 billion deficit after three years. In 2014-15, the nation’s deficit was forecast to grow to A$41.1 billion.
Growth in the Australian economy is expected to increase to 2.75 percent in 2015-16, from its current 2.5 percent, and 3.25 percent in the following year.
In his budget presentation, Hockey told that the Australian economy was able to manage the weaker than expected global demand, lower commodity prices and falling revenue. The economic plan laid down by this Government has enabled it to cope up with challenges from the falling iron ore prices, terrorist events in Sydney and Melbourne and terrible drought in Queensland and New South Wales, he added.
The currency has been firmer since morning, following upbeat Australian home loans data and on optimism ahead of Federal budget.
Data from the Australian Bureau of Statistics showed that the total number of new home loans issued in Australia was up a seasonally adjusted 1.6 percent in March, standing at 54,686. That beat forecasts for an increase of 1.0 percent following the 1.2 percent gain in February.
The aussie appreciated to 1.0822 against the NZ dollar, a level seen in late 2014. The aussie thus added 0.62 percent from yesterday’s closing quote of 1.0755.If the aussie extends rally, 1.10 is possibly seen as its next resistance level.
The aussie advanced to a 6-day high of 95.80 against the yen and a 5-day high of 0.7989 against the greenback, compared to Monday’s closing values of 94.74 and 0.7889, respectively. The aussie is seen finding resistance around 97.00 against the yen and 0.80 against the greenback.
Bouncing off from an early multi-day low of 0.9540 against the loonie, the aussie advanced to a 4-day high of 0.9616. Continuation of the aussie’s uptrend may take it to a resistance surrounding the 0.965 mark. The pair was valued at 0.9544 at Monday’s close.
The aussie, having fallen to a 4-day low of 1.4170 against the euro in early deals, rebounded to 1.4080. The euro-aussie pair was quoted at 1.4136 at yesterday’s close. Next key resistance level for the aussie may be located around the 1.40 region.
Looking ahead, U.S. NFIB small business index for April and U.S. Treasury Budget statement for the month of April are set to be published in the New York session.
At 12:45 am ET, Federal Reserve Bank of San Francisco President John Williams is expected to speak on the economic outlook before the Association for Business Economics in New York.
The material has been provided by InstaForex Company – www.instaforex.com