The economy of Australia remains stable at the moment.

The Australian dollar has started to weaken again since the beginning of the past month. This is due to investors' concerns about the country's declining trade surplus, which has reached its lowest level in 17 months. At the same time, Australia's GDP has expanded more than expected in the second quarter. However, it is predicted that Australia's economy will remain in a lower growth trajectory from here on, and unemployment is expected to gradually increase.

The Reserve Bank of Australia (RBA) has kept the interest rate at 4.1% during its recent meeting, marking the third consecutive month of interest rate stability. This decision aligns with market expectations, and the RBA stated that inflation has peaked but remains elevated, necessitating the continuation of the current interest rate for some time. The RBA also emphasized that a stronger policy stance may be needed to bring inflation back to the target range of 2-3% over an appropriate timeframe.

The RBA board forecasts that the inflation rate will be around 3.25% by the end of 2027 and is expected to return to the target range by late 2028. However, the timing of interest rate hikes will depend on economic conditions. Currently, Australia's economy is facing low growth and is expected to continue in this low-growth phase, leading to a gradual increase in the unemployment rate to approximately 4.5% by the end of the next year.

Despite Australia consistently running a trade surplus, the latest announcement reveals that Australia's trade surplus has decreased to only $8.04 billion Australian dollars. This decline comes after the previous surplus of $10.27 billion Australian dollars. The issue arises from a contraction in exports, while imports have increased. China, a significant trading partner of Australia, has experienced a substantial reduction in Australian exports. Simultaneously, imports have grown by 3%, totaling $45.88 billion Australian dollars. Consumer goods make up a significant portion of imports, which have increased by 6.9%.

Australia's economy expanded by 0.4% quarter-on-quarter (QoQ) in the second quarter of the year, which is the same rate of growth as in the first quarter. Additionally, there has been increased government investment in infrastructure, health, transportation, and national defense. Despite the relatively good economic performance, household consumption has decreased due to higher interest rates and a reduction in household savings rates.

Techical analysis data (5H)

Resistance: 1.5709, 1.5750, 1.5783

Support: 1.5636, 1.5602, 1.5562

Source: Investing.com