Australia to announce budget on Tuesday. AUDUSD stays just below the 200 hour MA.
Ahead of the Australia's budget to be released on Tuesday, the countries treasurer, Scott Morrison, said that voters should not expect a "mammoth" tax cut, and also committed to returning the country to a surplus as soon as possible.
Recent improvement in the governments accounts has fueled speculation that the current government would unveil some big tax cuts to sway voters.
The government has already said there would be a 5% reduction in corporate tax rates from 30% to 25% to keep Australia competive for investors.
Morrison said on Sunday, that low and middle income earners will be the 1st priority for further cuts. He said, the high earners would be further down the line.
However, he warned that the cuts would be modest.
He said:
"I'm not going to pretend that these are going to be man met tax cuts, they'll be what's affordable, they'll be what's real and they will be in what the budget can afford."
The government is expected to have a A$20.5 billion deficit in 2018/19, but is forecasting a surplus of A$10.2B in 2020/21.
However, there is speculation that the revenues from tax receipts will be higher than expectations (to be reported on Tuesday). That could lead to a surplus sooner than expected.
The AUDUSD remains just below it's 200 hour MA at 0.7541. On Friday, that MA was broken and failed in the Asian session, but the price could not extend above the key MA in the NY session post the weaker US employment report. If the AUDUSD is to correct higher, getting back above that 200 hour MA will be eyed . On the downside, the 100 hour MA at 0.7516 will be eyed.
