The Australian Dollar (AUD) experienced mixed movements against the US Dollar (USD) following a surge in USD strength due to positive US Initial Jobless Claims data. However, the AUD gained ground after Reserve Bank of Australia (RBA) Governor Michele Bullock’s hawkish comments.
Governor Bullock emphasized caution regarding inflation risks and readiness to raise rates if necessary, projecting that inflation may not reach the target range until late 2025. The RBA’s decision to maintain the cash rate at 4.35% further supported the Aussie Dollar.
Meanwhile, the US Federal Reserve (Fed) is expected to cut rates in September, as suggested by the CME FedWatch tool, impacting the USD’s performance against the AUD.
Market Update: RBA’s Policy Outlook Influences Australian Dollar Movement
- Westpac revised its RBA forecast, predicting a rate cut in February 2025 and increasing the terminal rate forecast to 3.35%. The RBA’s cautious approach requires strong evidence before considering rate adjustments.
- Kansas City Fed President Jeffrey Schmid hinted at potential monetary policy adjustments if inflation remains low, stating that the current policy is not restrictive.
- US Initial Jobless Claims fell below expectations, indicating positive labor market conditions.
- China’s Trade Balance showed a surplus in July, impacting Australia as a key trading partner.
- The AiG Australian Industry Index improved slightly in July but has shown contraction for the past twenty-seven months.
- RBA officials considered raising the cash rate due to demand concerns, reflecting the economy’s strength.
Technical Analysis: AUD/USD Pair Trends Upwards
The AUD/USD pair is currently around 0.6590, moving within an ascending channel on the daily chart. The RSI nearing the 50 level suggests a bullish bias. Support levels are at 0.6575 and 0.6520, while resistance lies at 0.6610 and 0.6798.
AUD/USD: Daily Chart
Australian Dollar Performance Today
The Australian Dollar (AUD) showed mixed movements against major currencies today. Notably, the AUD was strongest against the Euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.00% | -0.03% | -0.06% | -0.02% | -0.03% | -0.17% | -0.08% |
Australian Dollar FAQs
Learn more about the factors influencing the Australian Dollar (AUD) and its performance in the forex market.
What factors impact the Australian Dollar?
Interest rates, commodity prices, Chinese economy, inflation, and trade balance are key factors affecting the AUD.
How does the RBA influence the Australian Dollar?
The RBA sets interest rates to maintain stable inflation, impacting the AUD’s value.
Why is China important for the Australian Dollar?
China’s economy influences AUD due to trade relations and demand for Australian exports.
What role does Iron Ore play in the AUD’s value?
Iron Ore prices affect the AUD as it is a major Australian export, impacting trade balance and currency value.
How does the Trade Balance affect the Australian Dollar?
A positive trade balance strengthens the AUD by creating demand for exports, while a negative balance weakens it.