Australian Dollar Strengthens as RBA Maintains Hawkish Stance
- The Australian Dollar (AUD) rebounds against the US Dollar (USD) on Wednesday.
- AiG Industry Index shows slight improvement in September despite ongoing contraction.
- US Dollar gains support amid rising Middle-East tensions.
In the currency markets, the Australian Dollar has seen a resurgence against the US Dollar, with key factors contributing to this uptrend. The Reserve Bank of Australia (RBA) is expected to maintain a hawkish stance on its interest rate trajectory. Additionally, stimulus measures from Australia’s largest trading partner, China, have also provided support for the AUD.
Australian Economic Indicators
The AiG Industry Index showed a marginal improvement in September, rising by 4.9 points to -18.6 from the previous reading of -23.5. Despite this uptick, the index continues to indicate contraction for the 29th consecutive month. Furthermore, the AiG Manufacturing PMI declined by 2.8 points to -33.6, reaching its lowest level since the series began.
On the other hand, the US Dollar has received a boost from market caution due to escalating tensions in the Middle East. Iran’s recent missile attacks on Israel have heightened geopolitical risks, leading to a flight to safety towards the USD.
Daily Digest Market Movers: Key Insights for Traders
- Market expectations indicate a 63.1% probability of a 25 basis point rate cut by the Federal Reserve in November.
- Weaker-than-expected ISM Manufacturing PMI data for September has put downward pressure on the US Dollar.
- Australia’s Retail Sales for August exceeded market expectations, showcasing positive consumer spending trends.
- Fed Chairman Powell emphasizes a gradual approach to rate cuts, signaling a more moderate easing cycle.
- China’s Manufacturing PMI data shows mixed signals, with Caixin PMI indicating contraction while NBS PMI shows improvement.
- St. Louis Fed President advocates for gradual rate cuts following the recent half-point reduction.
- US Core PCE Price Index for August falls short of expectations, supporting the case for aggressive rate cuts by the Fed.
Technical Analysis: AUD/USD Outlook
The AUD/USD pair is currently trading near 0.6910, with a bullish bias evident in the daily chart analysis. The pair is striving to re-enter an ascending channel, supported by the 14-day RSI above the 50 level, indicating a positive sentiment.
For potential price movements:
- Resistance lies near the upper boundary of the channel around 0.7000.
- Immediate support is at the nine-day EMA at 0.6869.
- A break below this level could weaken the bullish bias, potentially leading to a decline towards 0.6622.
AUD/USD: Daily Chart
Australian Dollar PRICE Today
The table below illustrates the percentage change of the Australian Dollar (AUD) against major currencies today, highlighting its strength against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.45% | -0.44% | -0.44% | 0.70% | 0.35% | 0.00% | -0.04% | 0.41% |
| EUR | 0.45% | 0.44% | 0.44% | 0.70% | 0.35% | 0.00% | -0.04% | 0.41% |
| GBP | 0.45% | 0.44% | 0.44% | 0.70% | 0.35% | 0.00% | -0.04% | 0.41% |
| JPY | 0.45% | 0.44% | 0.44% | 0.70% | 0.35% | 0.00% | -0.04% | 0.41% |
| CAD | 0.45% | 0.44% | 0.44% | 0.70% | 0.35% | 0.00% | -0.04% | 0.41% |
| AUD | 0.45% | 0.44% | 0.44% | 0.70% | 0.35% | 0.00% | -0.04% | 0.41% |
| NZD | 0.45% | 0.44% | 0.44% | 0.70% | 0.35% | 0.00% | -0.04% | 0.41% |
| CHF | 0.45% | 0.44% | 0.44% | 0.70% | 0.35% | 0.00% | -0.04% | 0.41% |
Australian Dollar FAQs
Here are some frequently asked questions about the Australian Dollar (AUD) and its key influencers:
- Interest rates set by the RBA
- Chinese economy’s impact on AUD
- Iron Ore prices and their effect on the AUD
- Trade Balance and its influence on the AUD