The rates continue within a downward trend. At the same time, we have seen a loss of trend intensity since January 2019 due to the change in the FED's monetary policy and the weakening of the USD. Being under pressure for a long time, the Australian dollar, on the contrary , received support due to the improvement of the economic situation in China and reducing the risks related with the trade conflict between the US and China. Commodity prices have also been rising, as has investor interest in commodity currencies. Thus, the AUD consolidated and strengthened in the range of 0.7-0.727 USD.
The probability of a trend reversal has increased significantly in the last months, but this week, the Australian dollar was again under pressure due to weak macroeconomic reports that did not meet the expectations of investors. But the most negative factor was the minutes of the RBA meeting, according to which the next step of the central bank will be the rate decrease, which today is at the record low level for Australia. Moreover, this will happen in the near future.
The USD this week is again supported by strong macroeconomic statistics and strengthened despite investors' interest in safe assets. Reports for March showed an increase in the sales of new housing by 4.5%, which significantly exceeds the expectations of investors. The volume of orders for durable goods increased more than expected - by 0.4%. Earlier this month impressive data on unemployment in the US was obtained: the number of applications for benefits was the lowest for the last 50 years.
Today the USD will continue to remain in the spotlight: investors expect the US GDP data for the 1st quarter. Given the previously received reports, there is every reason to expect that GDP in the 1st quarter will grow by 2% as it was predicted, or even surpass this level. In this situation, we expect the continuation of the downtrend in favor of the USD. Therefore, the deals to SELL can be considered as the most effective in the medium and long term.
