The Australian Dollar Soars After PBoC Rate Cuts
- The People’s Bank of China (PBoC) Implements Rate Cuts
- Australian Dollar Benefits from Domestic Labor Data
The Australian Dollar (AUD) demonstrated strength against the US Dollar (USD) in a three-day winning streak, primarily driven by recent rate cuts in China, the largest trading partner of Australia.
PBoC Rate Cuts Boost Australian Dollar
The PBoC lowered the 1-year Loan Prime Rate (LPR) to 3.10% and the 5-year LPR to 3.6%, aligning with market expectations. These rate cuts are expected to stimulate China’s economic activity, potentially increasing demand for Australian exports.
Australia’s robust labor data further supported the AUD, reducing the likelihood of a Reserve Bank of Australia (RBA) rate cut this year. The strong employment growth and labor participation rate highlighted by RBA Deputy Governor Andrew Hauser have contributed to the positive outlook for the Australian Dollar.
Market Analysis: Impact on RBA and USD
- US Dollar Strengthens Amid Resilient Economic Data
- National Australia Bank Adjusts RBA Rate Cut Projections
- China’s GDP and Retail Sales Exceed Expectations
- Positive Signs in US Retail Sales and Jobless Claims
The recent data indicating the resilience of the US economy has dispelled speculations of a 50-basis-point rate cut by the Federal Reserve (Fed). The US Dollar has gained support, with a high probability of a 25-basis-point rate cut in November.
National Australia Bank has revised its projections, expecting the first RBA rate cut in February 2025. China’s GDP growth and Retail Sales figures exceeded market expectations, showcasing positive economic indicators for the region.
US Retail Sales and Jobless Claims also reflect a strong economy, with growth in both sectors surpassing previous figures.
Technical Analysis: AUD/USD Pair Overview
- Current Position of the AUD/USD Pair
- Support and Resistance Levels to Watch
The AUD/USD pair is currently trading around 0.6720, positioned below the nine-day Exponential Moving Average (EMA) with a short-term bearish bias. Support levels at 0.6700 and resistance levels at 0.6723 and 0.6740 indicate potential price movements for the pair.
Australian Dollar Performance Today
Today, the Australian Dollar has shown strength against major currencies, notably the Canadian Dollar. The percentage changes in the AUD against other currencies provide insights into its current performance in the market.
Economic Indicator: PBoC Interest Rate Decision
The People’s Bank of China’s (PBoC) Monetary Policy Committee (MPC) meetings and interest rate decisions play a crucial role in shaping China’s economic outlook. Monitoring these decisions can provide valuable insights into the future of the Chinese economy and its impact on global markets.