The AUD/USD pair is trading near 0.6790 in early Asian session, with the US Dollar (USD) under pressure following Federal Reserve Chairman Jerome Powell’s dovish speech at Jackson Hole. Powell hinted at upcoming rate cuts, likely to start with a quarter-point reduction in the September meeting. This expectation is expected to weaken the USD and provide support for AUD/USD.
Additionally, the Reserve Bank of Australia (RBA) expressed hawkish sentiments, suggesting that a rate cut is unlikely in the near future. RBA Governor Michele Bullock mentioned the possibility of raising rates to combat inflation if necessary. These comments could further strengthen the Australian Dollar against the Greenback.
Influential factors for the AUD include RBA interest rate decisions, commodity prices like Iron Ore, Chinese economic health, inflation, growth rate, and trade balance in Australia. Positive market sentiment also plays a role in boosting the AUD. The relationship between the RBA’s interest rate policy and the value of the Australian Dollar is crucial, with high rates supporting the AUD and low rates weakening it. China’s economic performance directly impacts the AUD due to its status as Australia’s largest trading partner.
Overall, the USD’s decline and positive outlook for the AUD indicate potential opportunities for investors and traders to capitalize on the currency pair’s movements in the coming days.