(AU) Australia released its Federal Budget projections which maintained a surplus of A$1.5B for 2012/13 period but widened its 2011/12 deficit to A$44.4B from prior deficit of A$37.1B seen in Nov.
(AU) Treasurer Swan has warned that this is just the start and it will continue to grow. Also saying that the budget will give some relief to the lower and middle income families and reiterated that the surplus will give the RBA additional room for rate cuts if needed.
WHAT DOES THIS MEAN?
It means that AUD looking for more downside potential as RBA has more rooms for rate cuts while the economy has shifted (due to high value in the AUD currency) from net export to net import… When considering an economy that is highly dependent of the other (China), AUD is open to risk… I’d definitely looking to SELL if AUDUSD were to retest recent resistance levels (1.0200 +/-) We’ll have the Employment Change Release out of AU tomorrow, it will be the next catalyst to SELL AUD if we get a weak number, therefore I’d recommend to read the plan and get ready for it:
RBA Has Additional Room For Rate Cuts On Budget Surplus
May 9, 2012 by Leave a Comment