The Australian Dollar Rises Amid Divergent Policy Outlook
- The Australian Dollar (AUD) continues its winning streak for the third consecutive session on Monday.
- China’s Caixin Manufacturing PMI declined to 49.3 in September, down from August’s 50.4 reading.
- Traders will likely focus on Fed Chair Jerome Powell’s speech on Monday.
The AUD is gaining ground due to a divergent policy outlook between the Reserve Bank of Australia (RBA) and the US Federal Reserve (Fed). The positive momentum follows China’s Purchasing Managers’ Index (PMI) data release, with expectations of continued policy easing by the Fed in November weakening the US Dollar and supporting the AUD/USD pair.
Market Movers: Australian Dollar Rises on RBA’s Hawkish Stance
- China’s NBS Manufacturing PMI improved to 49.8 in September, surpassing market consensus, while Non-Manufacturing PMI declined.
- The RBA’s hawkish stance contributes to the AUD’s upside as the cash rate remains unchanged to tackle inflation.
- St. Louis Fed President advocates for gradual rate cuts, acknowledging potential economic weakness.
- Australian Treasurer discusses China’s slowdown and stimulus measures during visit.
- US GDP remains steady at 3.0% in the second quarter.
- China plans a significant capital injection into state banks to address financial challenges.
- Risks in Australia’s financial system highlighted with concerns on Chinese financial stress.
- CBA predicts RBA may revise consumption forecasts downward, leading to potential rate cuts.
Technical Analysis: Australian Dollar’s Ascending Channel Pattern
The AUD/USD pair nears 0.6920, trading along the lower boundary of an ascending channel. Maintaining above indicates bullish momentum, supported by RSI above 50.
Resistance at 0.7000 level could signal further upside, while a break below may lead to a pullback. A bearish bias could emerge below the channel, testing EMA at 0.6853 and potentially reaching 0.6622.
AUD/USD: Daily Chart
Australian Dollar PRICE Today
The table below shows the percentage change of Australian Dollar (AUD) against major currencies today, with AUD performing strongest against the Japanese Yen.
For detailed FAQ about the Australian Dollar, read on below:
Australian Dollar FAQs
1. Interest rates, Chinese economy, and market sentiment are key factors influencing the AUD.
2. RBA sets interest rates to stabilize inflation, impacting AUD’s strength.
3. Chinese economy directly affects AUD due to trade relations.
4. Iron Ore prices impact AUD as it is a significant export for Australia.
5. Trade Balance affects AUD value based on exports and imports.