The Australian Dollar (AUD) breaks its losing streak against the US Dollar (USD) as the People’s Bank of China (PBoC) unexpectedly cuts lending rates, boosting commodity prices like coal and copper. This move is particularly beneficial for Australia, a major exporter of energy and metals, making its currency sensitive to commodity price changes.
AUD also gains support from the Reserve Bank of Australia’s (RBA) hawkish stance, expected to delay policy easing due to inflationary pressures and a strong labor market. Meanwhile, the USD may see appreciation as recent US economic data diminish Fed rate cut expectations for September.
Key market movers include robust US economic growth, lower Fed rate cut expectations, and the impact of Chinese economic conditions on Australian markets. Technical analysis suggests potential support levels for the AUD/USD pair around 0.6500 and resistance at 0.6570 and 0.6600.
Analysis Breakdown:
The PBoC’s rate cuts boosted commodities prices, benefiting Australia’s export-driven economy and strengthening the AUD. The RBA’s hawkish stance and positive US economic data further support the USD, impacting the AUD/USD pair. Market movements suggest potential trading opportunities based on technical analysis levels.