The Australian Dollar (AUD) bounced back from its intraday losses after the release of moderate employment data on Thursday. Despite facing challenges against the US Dollar (USD) due to declining copper and iron ore prices, the AUD managed to regain some ground. The pressure on the market was intensified by reduced demand and an oversupply of commodities, especially with worsening credit data from China.
Investors are closely monitoring the Reserve Bank of Australia’s (RBA) monetary policy stance, especially after RBA Governor Michele Bullock emphasized no rate cuts in the next six months. The central bank remains cautious about inflation risks and is ready to raise rates if necessary, despite positive wage growth in the second quarter.
On the other hand, the US Dollar faced challenges following the release of a moderate Consumer Price Index (CPI) data on Wednesday. The debate among investors revolves around the potential rate cuts by the Federal Reserve (Fed) in September, with possibilities ranging from a 25 to 50 basis point reduction.
Daily Digest Market Movers: Australian Dollar Gains Momentum Post Jobs Data
- Australian Employment Change for July exceeded expectations at 58.2K, while the Unemployment Rate rose to 4.2%.
- Federal Reserve Bank of Chicago President Austan Goolsbee expressed concerns about the labor market and rate cuts.
- US headline Consumer Price Index (CPI) showed a slight decrease in July’s annual inflation rate.
- Australia’s Westpac Consumer Confidence rose in August, while the Wage Price Index saw a slight increase in the second quarter.
Technical Analysis: Australian Dollar’s Bearish Momentum
The Australian Dollar is currently trading around 0.6590, testing the lower boundary of an ascending channel on the daily chart. The 14-day Relative Strength Index (RSI) confirms a bearish momentum below the 50 level.
Immediate support levels for the AUD/USD pair are at 0.6590, followed by the nine-day Exponential Moving Average (EMA) at 0.6580. A break below these levels could push the pair towards a bearish outlook, targeting 0.6575 and potentially 0.6470.
On the upside, breaking above the upper boundary of the ascending channel at 0.6690 could lead the pair towards its six-month high of 0.6798.
AUD/USD: Daily Chart
Australian Dollar Price Today
The Australian Dollar showed strength against major currencies today, with the highest gain against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.06% | 0.02% | 0.12% | 0.02% | -0.11% | 0.23% | 0.03% | |
| EUR | -0.06% | 0.05% | 0.05% | -0.04% | -0.26% | -0.01% | ||
| GBP | -0.02% | -0.05% | 0.11% | 0.01% | -0.20% | 0.05% | ||
| JPY | -0.12% | -0.11% | -0.12% | -0.27% | -0.05% | |||
| CAD | -0.02% | -0.01% | 0.12% | 0.14% | ||||
| AUD | 0.26% | 0.20% | 0.27% | |||||
| NZD | 0.01% | -0.05% | 0.05% | |||||
| CHF | 0.03% | -0.12% | 0.00% |
The Australian Dollar showed strength against major currencies today, with the highest gain against the Swiss Franc.
RBA FAQs
Learn more about the Reserve Bank of Australia (RBA) and its impact on the Australian Dollar (AUD).
The RBA manages monetary policy for Australia, aiming to maintain price stability and economic prosperity.
Moderate inflation tends to attract capital inflows and strengthen the local currency.
Macroeconomic data and economic indicators can influence the value of the Australian Dollar.
Quantitative Easing (QE) and Quantitative Tightening (QT) are tools used by the RBA to manage liquidity and currency value.
Analysis Breakdown
In summary, the Australian Dollar recovered from intraday losses due to moderate employment data, while facing challenges against the US Dollar amid declining commodity prices. The RBA’s stance on rate cuts and inflation risks is a key factor influencing the AUD’s movement. On the other hand, the US Dollar’s performance post CPI data release and expectations of rate cuts by the Fed add uncertainty to the market. Technical analysis indicates a bearish momentum for the AUD/USD pair, with key support and resistance levels to watch. The daily price movements against major currencies show the AUD’s strength, particularly against the Swiss Franc. Understanding the role of the RBA, inflation, economic indicators, and monetary policy tools provides insights into the factors affecting the Australian Dollar’s value.