The Australian Dollar’s Upside Momentum Continues Amidst Fed Decision Anticipation
- Improved Risk Sentiment Boosts AUD
- RBA’s Hawkish Stance Supports Australian Dollar
- Rising Odds of Fed Interest Rate Cut Weigh on USD
The Australian Dollar (AUD) showcases its strength against the US Dollar (USD) for the third consecutive day, driven by positive market sentiment. As investors eagerly await the Federal Reserve (Fed) interest rate decision, the likelihood of a 50 basis points cut supports risk-sensitive currencies like the AUD.
RBA’s Hawkish Stance
The AUD/USD pair is poised to extend its gains as the Reserve Bank of Australia (RBA) maintains a hawkish stance. RBA officials have emphasized the importance of not rushing into rate cuts due to persistent high inflation levels. Additionally, concerns about slowing wage growth are being monitored closely.
Fed Interest Rate Cut Expectations
The Fed is anticipated to lower interest rates at the September meeting after maintaining a steady rate range since July 2023. Market sentiment reflects a 67.0% probability of a 50-basis-point cut, up from the previous day’s 62.0%.
Daily Digest Market Movers: Key Highlights
- Jamie Dimon of JP Morgan comments on the potential impact of Fed rate cuts.
- US Retail Sales data shows resilient consumer spending in August.
- ANZ-Roy Morgan Consumer Confidence rises to an eight-week high.
- Economists revise China’s GDP growth forecasts amidst economic challenges.
- University of Michigan’s Consumer Sentiment Index reflects improved outlook.
- China’s economic indicators point to weakening activity.
- Australia’s Consumer Inflation Expectations show a slight decline.
Technical Analysis: AUD/USD Outlook
The AUD/USD pair hovers near 0.6760, with a potential bearish reversal indicated by the daily chart’s wedge pattern. Despite this, the RSI suggests a continuation of the bullish trend above the 50 level.
On the upside, a breakout could lead to a test of seven-month highs at 0.6798, followed by the key level of 0.6800. Resistance is seen at 0.6820. Support levels include the 9-day EMA at 0.6730 and 0.6700, with further downside potential towards 0.6575.
Australian Dollar PRICE Today
The Australian Dollar shows strength against major currencies today, particularly the US Dollar.
Australian Dollar FAQs
Understanding the factors influencing the Australian Dollar’s value, including interest rates, trade balance, and economic ties with China, can provide insights into its fluctuations.
By analyzing market movements, economic indicators, and central bank policies, investors can make informed decisions regarding the Australian Dollar’s performance.