AUDUSD Price Outlook Positive, Australian Federal Election Set for May 18
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AUD price, news and analysis:
- Australian Prime Minister Scott Morrison has called a Federal election for the middle of next month.
- That is unlikely to reverse the recent recovery in AUDUSD, which has been helped by early signs of an economic recovery in China.
AUDUSD outlook improves
The Australian Dollar, which slipped lower against its US counterpart between late January and early April, looks to have broken to the upside, helped by tentative signs of a recovery in China.
China is an important market for Australian exports so its economy is a major driver of the Aussie Dollar and news Thursday of a pickup in Chinese factory-gate inflation in March suggests that China’s economy could be reviving, helped by infrastructure spending and tax cuts.
For AUDUSD, that should outweigh any concerns about an Australian Federal election set for May 18 by Prime Minister Scott Morrison Thursday. Polls suggest the opposition center-left Australian Labor Party, led by Bill Shorten, is ahead of Morrison’s Liberal-National coalition.
AUDUSD Price Chart, Daily Timeframe (January 28 – April 11, 2019)
Chart by IG (You can click on it for a larger image)
The International Monetary Fund forecast this week that Australia’s economic growth will slow in 2019 to 2.1% from 2.8% in 2018, lowering its prediction for this year by 0.7 percentage points from its previous projection last October. Such an economic slowdown could lead to one or more interest rate cuts by the Reserve Bank of Australia this year.
However, for now, AUDUSD looks to be in a good place to continue its recent rally.
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--- Written by Martin Essex, Analyst and Editor
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.