Australian dollar forecasted to see more woe: AUD could be pressured below 0.96 versus Dollar should GDP data disappoint

Ahead of the next data event - we see the Australian dollar (Currency:AUD) sharply lower in line with a fresh decline in commodity prices:

The pound / Australian dollar currency rate is 0.87 pct higher at 1.5820. The euro to Australian dollar rate is a percent higher at 1.3530. The US dollar to Australian dollar exchange rate is a percent lower at 0.9673.

(Please Note: The above are wholesale market quotes; your bank will affix its own spread to the above when passing on their retail rates. However, an independent FX provider will guarantee to beat your bank's offer, thus delivering you more currency. Please learn more here.)

Reserve Bank of Australia governor jawbones AUD lower

Boris Schlossberg at BK Asset Management reflects on the past 24 hours for the Australian dollar saying:

"As expected the RBA kept rates on hold at 2.75% but its dovish stance put pressure on AUD/US throughout Asian and early European trading sending the pair below 96.50 as the night progressed."

The RBA remained stationary for now, but in its monthly policy statement Glenn Stevens noted that, "At today's meeting the Board judged that the easier financial conditions now in place will contribute to a strengthening of growth over time, consistent with achieving the inflation target. It decided that the stance of monetary policy remained appropriate for the time being. The Board also judged that the inflation outlook, as currently assessed, may provide some scope for further easing, should that be required to support demand."

Furthermore, despite the significant depreciation in the Australian dollar the RBA continued to jawbone the exchange rate lower, stating:

"The exchange rate has depreciated since the previous Board meeting, although, as the Board has noted for some time, it remains high considering the decline in export prices that has taken place over the past year and a half."

According to Schlossberg the next 24 hours could see woe heaped on the now under-fire Australian currency:

"The overall tone of the RBA statement put pressure on the Aussie as it suggested that the central remains open to further rate cuts and furthermore continues to pressure the exchange rate lower despite its already substantial decline.

"Tonight, the market will get a glimpse of the Q1 GDP data and if the news disappoints, the Aussie could be pressured back below the .9600 level as currency traders begin to price in the prospect of yet another rate cut. In the meantime, the unit is likely to remain a laggard especially against the euro which was firmer in overnight trade."

Consensus estimates are for an Australian Q1 Year-on-Year GDP reading of 2.7 pct; down from a previous reading of 3.1 pct.