Australia’s Judo Bank Services PMI Beats Expectations, AUD/USD Pair Slightly Up
The final reading of Australia’s Judo Bank Services Purchasing Managers Index (PMI) rose to 52.5 in August from 50.4 in the previous reading, surpassing market consensus of 52.2, as per data from Judo Bank and S&P Global. The Composite PMI also showed improvement, climbing to 51.7 in August compared to 51.4 prior.
Market reaction
At the time of writing, the AUD/USD pair was up 0.01% on the day, trading at 0.6712.
Australian Dollar FAQs
One of the most significant factors influencing the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Other key drivers include the price of its biggest export, Iron Ore, the health of the Chinese economy, inflation in Australia, growth rate, and Trade Balance. Market sentiment also plays a role, with risk-on sentiment being positive for the AUD.
The RBA’s decisions on interest rates impact the AUD by influencing lending rates in the economy. The goal is to maintain stable inflation rates, with high interest rates supporting the AUD. China’s economic health is crucial as it is Australia’s largest trading partner. Positive or negative surprises in Chinese growth data can directly affect the Australian Dollar.
Iron Ore prices, Australia’s largest export, also impact the AUD. Rising Iron Ore prices generally lead to an increase in the value of the AUD. Additionally, the Trade Balance, which reflects the difference between exports and imports, can influence the AUD’s value. A positive Trade Balance strengthens the AUD.