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This week we saw the RBA hold interest rates at 1.5% and the statement initially was taken well by the market as recent data was slightly ignored. However, RBA Governor Lowe was quick to say that lower housing prices continue to remain a large concern as well as the slowdown in wage growth. If this continues to be a concern, the RBA may have to act by decreasing interest rates, which should devalue the currency further. 450,000 households in Australia are in negative equity according to sources which is a huge concern for the Australian market.
The BoE also held interest rates this week at 0.75% and despite saying the growth in the UK is positive, they must consider all contingences with Brexit. This was always going to be the case with the BoE as their hands will remained ties until the UK leaves the EU.
CAD employment rose significantly from -1.3k to +68k boosting the Canadian dollar across the board.
NZD employment decreased from 1.1% to 0.1% highlighting growth problems here also.
EURUSD continues to stay within the trading range as the USD gained strength this week. Also growing concerns in the eurozone continues as Italy announces recession and German bonds decline.
AUDUSD found resistance at the weekly trendline and with the RBA having to consider rate decreases a close below 0.7050 will likely see further downside.
GBPUSD found support at the 1.2900 handle after the BoE suggested the data shows growth in the UK.