Aussie Bucks Global Moving-Average Trend: Technical Analysis

Australia’s dollar is set to rise as the currency remains the greenback’s only major counterpart to stay above its 200-day moving average this quarter.

The Aussie may strengthen 2.3 percent to 95 U.S. cents, according to IG Group Holdings Plc, extending its gain above the moving average at 91.75. The currency’s 4.4 percent advance this year makes it the best performer among Group of 10 developed-nation currencies amid speculation the Reserve Bank of Australia will avoid using lower rates to spur growth.

“The RBA outlook is supportive for the Aussie,” said Sean Callow, a strategist at Westpac Banking Corp. in Sydney. “While there is a lingering rate-cut risk there, particularly after the unemployment numbers that were a bit of a shock, it still isn’t particularly likely that the RBA cuts again.”

Australia’s dollar was as little as 0.6 percent above its 200-day moving average on Aug. 8, the day after data showed the nation’s jobless rate jumped to a 12-year high last month. RBA Governor Glenn Stevens said today the economy needs an injection of confidence rather than lower interest rates to stimulate growth, signaling policy will probably remain unchanged. The Aussie traded at 92.85 cents as of 7:07 a.m. in London.

Traders see the RBA cutting its 2.5 percent benchmark rate by six basis points, or 0.06 percentage point, during the next 12 months, compared with a projected decrease of as much as 15 basis points last month, a Credit Suisse Group AG index shows.

Callow said Australia’s higher-yielding debt makes the Aussie attractive against the euro, pound, Swiss franc and the New Zealand dollar. Signs of economic stability in China, Australia’s largest export market, and commodity prices are also supportive for the currency, he said.

The Aussie should remain strong for the rest of the quarter as easing in other developed nations increases the allure of Australian assets, said Junichi Ishikawa, a Tokyo-based analyst at IG. The Aussie may fall below its 200-day moving average in October after the Federal Reserve ends it asset-buying program, he said.

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