The Australian Dollar in Focus: Impact of Geopolitical Tensions and US Data
- AUD/USD slips as geopolitical tensions weigh on risk sentiment.
- US private hiring data improves, while Richmond Fed President Barkin warns about inflation concerns despite recent rate cuts.
- Traders await Australian PMI data with RBA’s focus on high inflation.
The Australian Dollar (AUD) experienced slight losses against the US Dollar late in Wednesday’s North American session, reaching a daily high of 0.6915 before falling to 0.6882. Geopolitical tensions, such as Iran’s missile attack on Tuesday and potential retaliatory actions from Israel, led to risk aversion and boosted safe-haven currencies.
Geopolitical tensions have also impacted the Greenback, with the US considering responses to Iran’s attack. Despite this, positive US private hiring data in September provided a boost. However, Richmond Fed President Thomas Barkin highlighted ongoing concerns about inflation, even after recent rate cuts.
Australian Dollar Market Focus
Traders are closely watching the release of September’s Judo Bank Services and Composite PMIs in Australia. The RBA remains cautious about high inflation levels and has not signaled the start of an easing cycle. Earlier, Retail Sales data from the Australian Bureau of Statistics exceeded expectations, supporting the RBA’s decision to maintain higher rates.
Daily Digest Market Movers: Australian Dollar and US Jobs Data
- The ADP National Employment Change for September surpassed forecasts at 143K, indicating positive private hiring trends.
- Market expectations for a Fed rate cut stand at 64%, with reduced likelihood of a 50 bps cut, according to the CME FedWatch Tool.
- Australia’s Judo Bank Services PMI is expected to decline in September, potentially signaling a slowdown in business activity.
- China’s economic slowdown has prompted stimulus measures from the PBoC, impacting global markets.
Technical Outlook: AUD/USD Short-Term Analysis
The AUD/USD is likely to retrace in the short term before testing the 0.6900 level. Momentum favors buyers, but the RSI suggests a short-term downside. Support levels include 0.6871 and 0.6856, while a break above 0.6900 could lead to a retest of 0.6934.
Australian Dollar FAQs
- Interest rates set by the RBA and the price of Iron Ore are key factors influencing the AUD.
- Chinese economic health impacts AUD due to trade relations and demand for exports.
- Iron Ore prices and Trade Balance also play a significant role in determining the AUD’s value.