The Australian Dollar (AUD) continued its upward momentum against the US Dollar (USD) for the second consecutive day, driven by hawkish comments from RBA Governor Michele Bullock. The AUD/USD pair benefited from the optimistic outlook provided by the Reserve Bank of Australia, which indicated no immediate rate cuts in the near future.
RBA Governor Bullock emphasized the central bank’s focus on potential inflation risks and the maintenance of stability in the current economic environment. This stance has bolstered the Australian Dollar and supported its gains against the US Dollar.
The US Dollar, on the other hand, faced downward pressure as traders fully priced in a 25 basis point rate cut by the US Federal Reserve in September. There is also speculation about a possible 50 basis point cut, with the CME FedWatch tool suggesting a 26% chance of such a move. Traders are closely watching the release of the preliminary US Michigan Consumer Sentiment Index for August.
Key Market Updates: Australian Dollar Strengthens, US Economic Indicators Perform Well
- US Retail Sales increased by 1.0% month-over-month in July, surpassing expectations and signaling a rebound from the previous month’s decline.
- The People’s Bank of China (PBoC) announced the renewal of medium-term lending facility funds, impacting both the Chinese and Australian markets due to their close trade relations.
- China’s Retail Sales and Industrial Production data for July showed mixed results, influencing market sentiment and trade dynamics.
- Australian Employment figures exceeded expectations, but the Unemployment Rate saw a slight increase. Consumer Inflation Expectations also rose for August.
- Federal Reserve Bank of Chicago President expressed concerns about the labor market and inflation, indicating that rate cuts will be based on economic conditions.
- US Consumer Price Index (CPI) figures for July showed a slight decrease, with Core CPI aligning with market forecasts.
- Atlanta Fed President’s comments on inflation and interest rates added to the market’s uncertainty about future Fed actions.
Technical Analysis: AUD/USD Pair Testing Key Levels
The Australian Dollar is currently trading around 0.6620 against the US Dollar, testing the lower boundary of an ascending channel. A break below this level could signal a shift in the bullish trend. The 14-day Relative Strength Index (RSI) supports the current bullish momentum.
In terms of support levels, the AUD/USD pair faces immediate resistance at 0.6610, followed by the nine-day Exponential Moving Average (EMA) at 0.6593. A bearish outlook could emerge if the pair falls below these levels. On the upside, breaking above 0.6720 could lead to further gains towards the six-month high of 0.6798.
AUD/USD: Daily Chart
Australian Dollar Price Today
The table below shows the percentage change of the Australian Dollar (AUD) against major currencies, with the AUD performing strongly against the USD.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.17% | -0.08% | -0.07% | -0.16% | 0.17% | -0.01% | 0.05% |
Australian Dollar FAQs
Learn more about the factors influencing the Australian Dollar (AUD) and its interactions with the global economy:
Interest rates, trade balance, and market sentiment are key drivers of the Australian Dollar’s value.
The Reserve Bank of Australia’s interest rate decisions play a significant role in shaping the AUD’s performance.
The health of the Chinese economy has a direct impact on the Australian Dollar due to their trade relations.
Iron Ore prices, Australia’s major export, can influence the value of the Australian Dollar.
The Trade Balance of Australia also plays a role in determining the strength of the Australian Dollar.
Understanding these factors can help individuals make informed decisions about their investments and financial strategies.