The AUD/USD pair remains stable after RBA’s Chief Economist Sarah Hunter’s remarks on the impact of high interest rates on demand. Hunter’s comments suggest a mild economic downturn could be on the horizon, but RBA Governor Michele Bullock remains optimistic about the economy.

Meanwhile, President Donald Trump’s stance on import fees and their effect on US prices adds to the market uncertainty, fueling speculation about the future of the global economy.

Market Analysis: What You Need to Know

  • Markets anticipate a 25 bps rate cut by the Federal Reserve in September, with a slight decrease in the likelihood of a 50 bps cut.
  • China’s economy faces deflationary pressures, prompting the need for stimulus measures to combat the challenges.
  • Australia’s economic indicators show mixed results, with consumer confidence falling and trade balance improving.
  • RBC Capital Markets predicts a rate cut by the RBA in early 2025, citing slower economic growth as a factor.
  • The US labor market report indicates modest job growth in August, with the unemployment rate slightly declining.
  • Fed officials align with market sentiment on impending policy rate adjustments, hinting at potential changes in the near future.

Technical Outlook: AUD/USD Pair’s Next Moves

The AUD/USD pair hovers around 0.6650, signaling a bearish trend within a descending channel. The RSI confirms the bearish bias, with potential support levels at 0.6620 and 0.6575. On the upside, resistance levels are at 0.6693 and 0.6740, with a possible retest of the high at 0.6798.

Stay Informed: Australian Dollar’s Strength Today

Economic Indicator: Consumer Price Index (YoY)

The Consumer Price Index (CPI) is a key indicator of inflation trends, with the latest data playing a crucial role in shaping market expectations. Stay updated on the latest CPI figures to make informed decisions in the financial markets.

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