The AUD/USD pair experienced significant gains on Thursday, fueled by a combination of soft US economic data and the Reserve Bank of Australia’s (RBA) hawkish outlook on interest rates.
RBA Governor Bullock reiterated the bank’s aggressive stance on rates, signaling that no near-term cuts are on the horizon. This divergence in monetary policy between the US and Australia has favored the Aussie, pushing the currency higher against the greenback.
Key Market Insights: Australian Dollar Strengthens on Trade Figures and RBA’s Stance
- Australian exports saw a modest increase in July, while imports declined, reflecting a positive trade balance for the country.
- Exports to China, a key trading partner, experienced a notable drop, impacting coal and iron ore prices.
- RBA’s commitment to holding rates steady in the near future contrasts with the US, where disappointing labor market data weighed on the USD.
- The ongoing monetary policy divergence between the two countries continues to support the AUD, with expectations of a potential rate cut by the RBA later in the year.
Technical Analysis: AUD/USD Outlook and Potential for Further Gains
Despite mixed signals from indicators like the RSI and MACD, the overall technical outlook for the AUD/USD pair remains positive. Trading above the Simple Moving Average (SMA), the pair is poised to retest levels above 0.6780 in the near term.
Disclaimer: The information provided is for illustrative purposes only and should not be considered financial advice. It is recommended to consult with a professional before making any investment decisions.