The Australian dollar weakened against the other major currencies in the Asian session on Monday amid growing expectations of a rate cut by the Reserve Bank of Australia and weak iron ore prices.
The Reserve Bank of Australia’s interest rate decision is due on April 7. Some economists expect another interest rate cut to a new record low of 2 percent at the upcoming meeting. In February, it cut the cash rate down to a record low of 2.25 percent, while also indicating that further easing may be needed at its March meeting.
The equity markets in Australia and New Zealand are closed for Easter Monday holiday.
Friday, the Australian dollar rose against its major rivals, after the release of weaker-than-expected U.S. monthly jobs data for the month of March that raised concerns about a slowdown in the world’s largest economy. The Australian dollar rose 1.09 percent against the U.S. dollar, 0.62 percent against the yen and 0.30 percent against the Canadian dollar.
In the latest in a recent string of disappointing economic data, the U.S. Labor Department released a report showing that employment in the U.S. rose by much less than expected in the month of March.
The report said non-farm payroll employment rose by 126,000 jobs in March following a downwardly revised increase of 264,000 jobs in February. Economists had expected employment to increase by about 245,000 jobs compared to the addition of 295,000 jobs originally reported for the previous month.
In the Asian trading today, the Australian dollar fell to a new record low of 1.0020 against the NZ dollar, from Friday’s closing value of 1.0049.
The aussie slipped to a 3-month low of 0.9494 against the Canadian dollar and a 5-week low of 1.4425 against the euro, from last week’s closing quotes of 0.9524 and 1.4373, respectively. If the aussie extends its downtrend, it is likely to find support around 0.93 against the loonie and 1.46 against the euro.
Against the U.S. dollar, the aussie edged down to 0.7608 from Friday’s closing value of 0.7626. On the downside 0.74 is seen as the next support level for the aussie.
Pulling away from an early high of 90.94 against the yen, the aussie edged down to 90.63. The aussie may test support near the 89.17 region.
Looking ahead, Japan preliminary leading index data for February is due to be released at 1:00 am ET.
In the European session, Eurozone Sentix investor confidence index for April is slated for release.
In the New York session, final Markit U.S. services PMI, ISM’s U.S. non-manufacturing index, U.S. labour market conditions index and Canada Ivey PMI – all for March, are set to be published.
At 8:00 am ET, U.S. Federal Reserve Bank of New York President William Dudley will deliver a speech about the economic outlook at the New Jersey Performing Arts Center.
The material has been provided by InstaForex Company – www.instaforex.com