In its report released today, NAB said that the expected rate cut in Australia might come earlier due to the poor economic performance of the country.
NAB previously predicted the rate cut to happen in November this year, but revised that to August in today's report. Some of the factors highlighted by the report include weakness in the domestic economy and in China, as well as weaker terms of trade and volatility in the financial market.
The report summarised that: "Business conditions and capacity utilisation slump to a four year low. Confidence a little better but still below trend. Conditions very bad in retail, mining and manufacturing, despite low interest rates and falling AUD, though signs a little better for exports. Plenty of spare capacity with little indication of being utilised in the near term; forward orders and employment still very poor.".
Earlier, the AUD/USD pair went downhill after higher than expected inflation figures came from China. It came out at 2.7% YoY, against analysts' expectations of just 2.5%. The number was previously just at 2.1%.
The pair is currently trading at the 0.9102 level, with initial resistance seen at 0.9194, followed by 0.9217. Meanwhile, initial support is at 0.9087, followed by 0.9064.
The USD/JPY pair, on the other hand, moved higher at the start of today's Asian trading and returned to the 101.00 level. The pair is currently trading at the 101.08 level, with initial resistance seen at 101.27, followed by 101.52. As for the initial support, it is at 100.49, followed by 100.23.
Meanwhile, the EUR/JPY pair has been moving sideways over the past few hours and has traded between the 129.800 and 130.100 levels. The pair is currently trading at 129.925, with initial resistance seen at 130.49, followed by 130.81. On the other hand, initial support is at 129.67, followed by 129.34.
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