AUD/USD Daily fundamental analysis for April 26, 2011

The Australian currency has dropped for the first time in five days against the US counterpart after the Australian government noted that the nation needs to cut its spending because of the tax revenue that was generated between 2004 and 2007 by the mining industry’s previous expansion will drop. Nonetheless, the AUD/USD still rallied to a record with the weak dollar and surging gold prices supporting aussie. 

 

The Australian government warned that the European debt crisis and Japanese earthquake are starting to hurt parts of the nation’s economy, damping the demand for Australian dollar and increasing volatility for the coming week.

 

The March 11 earthquake and tsunami devastation in Japan is forecast to cut commodity export revenue by A$2 billion, while floods and a cyclone in Queensland state earlier this year will likely cost the economy A$9 billion 

 

Amid the government’s efforts, they announced that the economy will cut the surplus as natural disasters crimp tax revenue and a strong currency puts pressure on tourism and manufacturing.

 

on Tuesday the market awaits the Australian Consumer Prices Index (CPI) during the first quarter of the year due for release at 01:30 GMT, which is estimated to show an increase by 1.2% from 0.4% a quarter earlier. While the annualized consumer price index will accelerate by 3.0% as the expected during the year ending March, from 2.7%. 

 

The US economy will release the consumer confidence for the month of April at 14:00 GMT and expected to show an increase to 64.5 from 63.4.