With the Reserve Bank of Australia (RBA) interest rate decision approaching, Traders will look for economic numbers to match the RBA statement.
The Australian government is hoping that the outlook for the year turns to reality and that China decline is compensated by other trading partners such India and Japan. The RBA is expecting GDP growth to remain stable but with unemployment likely to remain week the expected figure of 2.5% can be a bit too high.
It is well know by now that the government is cutting their budget and moving it around from non-profitable public funding to support expansion in private business in the construction industry. With the mining industry not at its best and manufacturing unlikely to boom, the construction sector is likely to receive plenty of support, mainly for infrastructure projects.
Building permit and construction data will be more important now than before. Yet the economic outlook for Australia has incredibly been slightly raised for 2014 and 2015. According to the International Monetary Fund Australia should focus in improving productivity and keep Australian wages stable meanwhile inflation is due to pick up at the same time. The RBA is expected to keep interest rate low to support borrowings. How is it going to work? Perhaps, with a lower currency till the next boom.
The AUDUSD has rapidly fallen from its crest and has been support very little at the current levels. In fact, the AUDUSD can be considered expensive specially considering that the US Dollar is expected to gain ground and bounce back from its low. Is there is something that will benefit Australia as economic in the current global environment will be a lower currency and some real help from the RBA.