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Australian Dollar subdued after employment report

2 months ago
2 months ago


The Australian Dollar and Federal Reserve’s Rate Cut Impact on Markets

The recent developments in the Australian Dollar (AUD) and the Federal Reserve’s rate cut have sent ripples through the financial markets. Here’s a breakdown of the key events and their implications:

Australian Employment Change Surpasses Expectations

  • Australian Employment Change rose by 47.5K in August, exceeding the consensus forecast of 25.0K.

  • The Unemployment Rate remained steady at 4.2% in August, aligning with expectations.

  • Despite the positive data, the AUD dipped against the USD post-release.

Federal Reserve’s Rate Cut and Economic Outlook

  • The Fed’s 50 basis points interest rate cut signals a proactive approach to safeguarding the economy.

  • Fed policymakers revised their economic forecasts, projecting a higher unemployment rate and long-term federal funds rate.

  • The move reflects the Fed’s commitment to maintaining a strong labor market and sustainable economic growth.

Market Insights and Outlook

  • JP Morgan CEO Jamie Dimon downplays the impact of rate cuts on the broader economy.

  • US Retail Sales data indicates resilient consumer spending in August.

  • ANZ-Roy Morgan Australian Consumer Confidence rises to an eight-week high, despite lingering pessimism.

  • Economists revise China’s GDP growth forecasts amidst concerns of a “downward spiral.”

Technical Analysis of AUD/USD Pair

The AUD/USD pair hovers near 0.6750, showing signs of a potential bearish reversal.

  • RSI suggests a possible bullish trend continuation despite the current positioning.

  • Key resistance levels at 0.6798 and 0.6810, with support at 0.6733 and 0.6700.

Australian Dollar’s Performance Against Major Currencies

The Australian Dollar weakened against the US Dollar but showed mixed results against other major currencies.

  • USD: AUD down by 0.23%

  • EUR: AUD up by 0.11%

  • GBP: AUD up by 0.13%

  • JPY: AUD down by 0.83%

  • CAD: AUD up by 0.02%

  • NZD: AUD down by 0.13%

  • CHF: AUD up by 0.28%

Australian Dollar FAQs

Here are some common questions regarding the Australian Dollar (AUD) and its influencing factors:

  1. How do interest rates and RBA decisions impact the AUD?

  2. What role does the Chinese economy play in determining the value of the AUD?

  3. How does the price of Iron Ore affect the Australian Dollar?

  4. What is the significance of the Trade Balance on the AUD’s value?

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