EURAUD is moving in the Descending channel and the market has fallen from the lower high area of the channel.
The Reserve Bank of Australia is all set to release their meeting minutes and it is expected that the minutes will feature results after taking into account the recent release of the employment change data which came higher than expected. Find out more below:
Australia Food Shortages
The recent heavy rains in Australia, which were to blame for some food shortages in the country, have also given a boost to agricultural exports. It is anticipated that this will be the most profitable year ever for the country’s farmers. According to the Australian Bureau of Agricultural and Resource Economics, it is anticipated that agricultural exports would reach a record high of $75 billion (or 62.3 billion pounds) in the year that will finish in June (ABARES).
AUDUSD is moving in the Descending channel and the market has reached the lower high area of the channel.
Wheat, which is Australia’s most important agricultural export, has seen its price rise as a direct result of the conflict in Ukraine. According to Mr. Greenville, price increases can also be attributed to droughts in other key exporting nations as well as the conflict in Ukraine, which was a significant provider of grain products like wheat until the conflict broke out. On the other hand, he stated that drier weather should be anticipated in the next months as a result of the weakening of climatic phenomena known as La Nia.
Over the course of the past several years, many occurrences of the La Nina weather pattern have resulted in decreased global temperatures and increased precipitation in a number of nations, including Canada and Australia. Australia, along with countries all across the world, has been affected by problems in the food supply chain that have been created by the conflict in Ukraine and the epidemic COVID-19 virus. The country’s own food production has also been impacted by the country’s recent string of severe weather. For instance, severe floods on the east coast of the nation the year before led to a shortage of fresh fruits and vegetables. The same situation occurred last year.
RBA Governor Speech
Assistant governor of the RBA Christopher Kent recently gave a speech regarding the monetary policy of the RBA and how it impacts the nation. He reveals, “It was 30 years ago this month when the Bank first raised the concept of inflation targeting in a speech by then Governor Bernie Fraser. His description closely matches the formulation that is used now – namely, a flexible medium-term inflation target whereby the Bank aims to keep inflation within the range of 2–3 percent on average over time. Currently, the Bank is focused on bringing inflation back down to the target range. High inflation imposes a significant burden on the finances of all Australians.
GBPAUD is moving in an Ascending channel and the market has rebounded from the higher low area of the channel
“The rise in interest rates, which is needed to rein in inflation, imposes an extra burden on mortgage holders, but that burden will be higher still if we don’t bring inflation down in a timely manner. The transmission of tighter monetary policy through economic activity and inflation takes time. Monetary policy affects the spending and investment of businesses and households with a lag. In turn, those changes in demand take time to have their full effect on the setting of prices and wages. These lags mean that central banks need to set monetary policy with a view to the future when it will be having its strongest effects. If instead, the transmission of policy was rapid, we could use timely course corrections to navigate the economic path. However, the presence of lags in transmission adds a challenge to the setting of monetary policy.
“In summary, the lagged effect of the cash flow channel of monetary policy is likely to be somewhat elongated currently due to the high proportion of fixed-rate loans and sizeable buffers held by many borrowers. This means that it’s likely to take longer than usual to see the full effect of higher interest rates on household cash flows and household spending. However, only one-third of households have a mortgage and the cash flow channel is only one way in which higher interest rates affect the economy. Ultimately, what matters for demand and inflation is how businesses and households overall – not just the borrowers among them – respond to higher interest rates through all the channels of monetary policy.”
Australia Employment Change
After two months of decreases, employment in Australia firmly rebounded in February, while the unemployment rate fell back to near 50-year lows. This suggests that the country’s labor market continued to be tight despite a number of interest rate rises that were implemented by the central bank. Thursday’s data release from the Australian Bureau of Statistics (ABS) indicated that the country’s overall employment levels increased by 64,600 in February compared to the previous month when they had fallen by a revised 10,900.
AUDCAD is moving in the Descending channel and the market has reached the lower high area of the channel.
The predictions of the market had called for a comeback of 48,500. Even though investors are overwhelmingly leaning toward a pause in rate hikes in April, they have also priced in an approximately 10% chance that the RBA could actually cut its 3.60% cash rate by 25 basis points. This is despite the fact that investors are leaning toward a pause in rate hikes in April. A month ago, investors anticipated that interest rates would reach their highest point at 4.10%; but, by August, the same investors anticipated that they would decline to 3.35%.
According to Bjorn Jarvis, head of labor statistics at the ABS, the increase in employment in February was due to a larger-than-usual number of persons making the transition back into employment after having left the workforce in January.
Australia-Iran Sanctions
Fresh sanctions have been implemented by Australia against Iran. These sanctions target members of Iran’s morality police who were involved in the killing of Amini, as well as those who are selling drones to Russia in the midst of Moscow’s invasion of Ukraine. This decision comes after Australia issued sanctions against key Iranian military and government figures a month ago, as well as the leaders of Myanmar’s military junta for plotting a coup attempt.
AUDJPY is moving in an Ascending channel and the market has reached the higher low area of the channel.
On Monday, the government announced that it would be expanding its Magnitsky Act–style targeted financial sanctions and travel bans to include an additional 14 individuals. Additionally, the government announced that it would be expanding its Magnitsky Act–style financial sanctions to include an additional 14 Iranian entities responsible for egregious human rights abuses and violations in Iran.
Nonetheless, a brutal crackdown was carried out in response to the demonstrations. In connection with the demonstrations, the Human Rights Activists News Agency (HRANA) reports that hundreds of people have been killed, thousands have been arrested, four young men have been hanged, and more than a dozen others have been sentenced to death. HRANA also reports that four young men have been executed by hanging.
Don’t trade all the time, trade forex only at the confirmed trade setups.
Get more confirmed trade setups here: forexgdp.com/buy/
