The AUD/USD pair continues to drop for the third consecutive day following the release of disappointing Westpac Consumer Confidence data from Australia on Tuesday. Meanwhile, the US Dollar received a boost from recent labor market reports, diminishing expectations of a significant rate cut by the Federal Reserve in September.
Westpac Consumer Confidence in Australia fell by 0.5% in September, reversing the previous month’s 2.8% gain. Traders are now focusing on China’s Trade Balance data, which could have a notable impact on Australian markets due to the close economic ties between the two countries.
Despite the negative data, the Australian Dollar’s downside may be limited by the hawkish stance of the Reserve Bank of Australia (RBA). RBA Governor Michele Bullock recently stated that rate cuts are not on the immediate agenda, providing some support for the AUD.
Market Analysis: Australian Dollar Faces Pressure Amid Risk Aversion
- The CME FedWatch Tool indicates a high probability of a 25 basis point rate cut by the Federal Reserve in September, with a slight decrease in expectations for a larger 50 bps cut.
- China’s Consumer Price Index (CPI) figures for August showed a slight increase, but below market expectations, which could impact the Australian Dollar.
- RBC Capital Markets forecasts a potential rate cut by the RBA in early 2025, citing concerns over economic growth despite elevated inflation levels.
- The US Nonfarm Payrolls report for August revealed mixed results, with job additions falling short of forecasts but a decrease in the Unemployment Rate.
- Fed officials, including Chicago Fed President Austan Goolsbee, are hinting at an upcoming policy rate adjustment, aligning with market expectations.
Technical Outlook: AUD/USD Testing Key Support Level
The AUD/USD pair is currently hovering around the 0.6650 level, testing the lower boundary of a descending channel on the daily chart. The RSI indicator also indicates a bearish trend for the pair.
If the pair breaks below the 0.6630 support level, further downside movement towards 0.6575 could be expected. On the upside, a break above the 0.6703 resistance level could shift the bias in favor of the AUD/USD pair.
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 being weakest against the USD today.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.00% | 0.06% | 0.17% | 0.07% | 0.13% | 0.19% | 0.02% | |
| EUR | -0.01% | 0.06% | 0.16% | 0.06% | 0.11% | 0.13% | 0.01% | |
| GBP | -0.06% | -0.06% | 0.09% | -0.03% | 0.07% | 0.09% | -0.02% | |
| JPY | -0.17% | -0.16% | -0.09% | -0.12% | -0.05% | -0.02% | -0.15% | |
| CAD | -0.07% | -0.06% | 0.03% | 0.12% | 0.05% | 0.12% | -0.03% | |
| AUD | -0.13% | -0.11% | -0.07% | 0.05% | -0.05% | 0.04% | -0.09% | |
| NZD | -0.19% | -0.13% | -0.09% | 0.02% | -0.12% | -0.04% | -0.13% | |
| CHF | -0.02% | -0.01% | 0.02% | 0.15% | 0.03% | 0.09% | 0.13% |
FAQs About the Australian Dollar
Here are some common questions and answers about factors influencing the Australian Dollar:
- Interest rates set by the RBA
- Impact of the Chinese economy
- Price of Iron Ore
- Trade Balance
Understanding these factors can help traders and investors make informed decisions regarding the Australian Dollar and its potential movements in the financial markets.