The Aussie traded higher against the US dollar on Monday after the nations elections and increased number of home loans in August.
AUD/USD reached a session high at 0.9209 during the early Asian trade, after which consolidation followed at 0.9199, gaining 0.09% on a daily basis. Support was expected at September 6th low, 0.9115, while resistance was to be encountered at August 19th high, 0.9232.
Conservative Tony Abbott will soon take over the Prime Minister post in Australia, after he won a majority at the national elections, conducted on Saturday, as such an outcome was in consonance with expectations. Achieving this victory, Abbot ended the Labor Partys six-year stay in office. As political uncertainty subsided and new policies to support companies, including those operating in the sector of mining, were on the horizon, this could boost activity in nations financial markets and favor the national currency. Some experts predict that business and consumer confidence in the country may rise, with effects seen as early as this October.
Tony Abbott’s coalition has vowed to achieve a budget surplus equal to 1% of Australian Gross Domestic Product within a decade. A challenge in front of the new government will be the implementation of the promised tax cuts, including a reduction of the company rate by 1.5% to 28.5%.
In its August monetary policy statement the Reserve Bank of Australia (RBA) has estimated that a 10% decrease in the value of the Australian dollar could boost countrys Gross Domestic Product by between 0.5% and 1% in about two years. RBA Governor Stevens said last week that further declines would facilitate a possible rebalancing of Australian economic growth.
In addition, the number of Australian mortgage approvals rose by 2.4% in August compared to July, exceeding preliminary estimates of a 2.0% increase. Investment lending, on the other hand, rose by 2.9% in August. Mortgage loans sector in the country continued to show a stable rate of improvement, while other economic indicators, such as consumer confidence has shown mixed readings so far this year. However, economic outlook remained dimmed, as activity in the mining sector, a major contributor to countrys growth over the past decade, was decelerating.
On the other hand, Australia and New Zealand Banking Group (ANZ) said that the number of job advertisements in Australia fell by 2.0% in August on a monthly basis, after a 1.1% drop in July.
Meanwhile, the National Bureau of Statistics in China reported that Chinese CPI advanced 0.5% in August, following a 0.1% uptick in July. Economists had expected an increase by 0.4% in August. Chinese PPI improved to -1.6% in August from -2.3% a month ago. Analysts had projected a PPI reading of -1.8% in August. These data points also influenced the Aussie, as China is Australias largest export partner.
Elsewhere, the Australian dollar was higher against the euro, with EUR/AUD cross erasing 0.13% to trade at 1.4323 at 8:04 GMT. AUD/NZD pair was gaining 0.11% on a daily basis to trade at 1.1502 at 8:05 GMT.
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