Australian dollar continued its slide versus the US counterpart during Tuesday Asian session, as the bearish tendency was boosted by not so encouraging comments by Goldman Sachs.
AUD/USD pair dropped to session low at 0.9380, after which consolidated at 0.9407, still down by 0.61% for the day. Support was expected at October 4th 2011 low, 0.9390, while resistance was to be met at 0.9574, June 7th high.
Australian dollar was put under selling pressure after Goldman Sachs reduced its 2013 and 2014 GDP growth forecasts. The investment bank stated that Australian economy will expand by 2% this year, while the previous estimate showed a 2.4% growth. In 2014 Australias GDP will rise by 1.9%, below the previous forecast of 2.7% growth.
Additionally, experts from the bank saw AUD/USD pair trading at 0.8500 within a year. Decreasing export prices along with a strong domestic currency could lead to cuts in public and corporate expenditures, according to Goldman Sachs. Recession chance for Australia was 20%.
Earlier today official reports showed that Home Loans in Australia slowed down the increase rate to 0.8% in April, mismatching forecasts of a 2.0% rise, while revised data during the preceding month stated a 4.8% increase. Investment Lending also recorded a slower rate of increase in April, 1.1%, while the previous month change showed a 1.4% jump. This news gave investors an additional selling impulse, regarding the Aussie.
Meanwhile, US dollar received support after on Monday Standard & Poors ratings agency increased its long-term outlook for the US credit rating, due to improving economic environment.
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