As the world’s best investment manager and financial market journalist, I bring you the latest update on the AUD/USD pair trading around 0.6555 in the early Asian session on Monday. The US PCE inflation increased by 2.5% year-on-year in June, indicating an improving inflation environment. The hawkish stance of the RBA could further support the Aussie.
Market participants are closely watching the Australian Retail Sales data on Tuesday and the Australian Consumer Price Index (CPI) and Fed Interest Rate Decision on Wednesday. The recent data released by the US Bureau of Economic Analysis showed a slight decrease in the PCE Price Index, which could impact the market sentiment.
The Fed’s decision to maintain the current interest rates has led to speculation of three rate cuts this year, starting in September. This has put pressure on the US dollar and created a positive environment for AUD/USD trading. Meanwhile, the RBA’s potential rate hike in the fourth quarter could limit the depreciation of the Australian Dollar.
Analysis:
The key factors influencing the Australian Dollar include interest rates set by the RBA, the price of Iron Ore, the health of the Chinese economy, inflation rate, growth rate, and Trade Balance. Market sentiment also plays a crucial role in determining the value of the AUD. The RBA’s monetary policy decisions and the Chinese economy’s performance directly impact the Australian Dollar. Additionally, the price of Iron Ore, Australia’s largest export, and the Trade Balance also influence the value of the AUD.