Australian Dollar Movement and Economic Insights
- The Australian dollar has strengthened as expectations for a cut in RBA rates in November have diminished.
- RBA Governor Michele Bullock indicated that the job market is somewhat weaker and unemployment is on the rise.
- San Francisco Fed President Mary Daly suggested that more interest rate cuts might be necessary to restore price stability and support the workforce.
The Australian Dollar (AUD) improved against the US Dollar (USD) on Thursday, bouncing back from losses suffered recently. The AUD/USD exchange rate was influenced by a stable US dollar as the US GDP growth data for Q2 was anticipated later in the day. Market watchers are also keen on remarks from officials at the US Federal Reserve.
Support for the AUD came from Australia’s Consumer Price Index (CPI) data, which rose by 3.0% year-over-year in August, up from a 2.8% increase in July. The likelihood of a rate cut by the Reserve Bank of Australia (RBA) has dropped to 50% for the November meeting compared to nearly 70% before the data release, as noted by Reuters.
Earlier this week, RBA Governor Bullock remarked that while interest rate cuts should aid households and businesses, it’s important for the RBA to stay alert to changes in the economic landscape and be ready to adjust its strategy as needed.
Australian Dollar Gains as US Dollar Weakens
- The US Dollar Index (DXY), which gauges the dollar against six key currencies, hovered around 97.80 during this report.
- San Francisco Fed President Daly reiterated on Wednesday that additional rate cuts may be required as central banks aim to stabilize prices and support the labor market.
- Chicago Fed President Austan Goolsbee has stepped back from suggesting consecutive rate cuts by the end of the year, highlighting a divide between Fed members and former President Trump’s nominee for the Fed, Stephen Milan.
- The US S&P Global Composite PMI showed a decline from August’s 54.6 to 53.6, indicating struggles in the private sector. The Manufacturing PMI dipped from 53 to 52.0, suggesting waning momentum, while the Services PMI fell from 54.5 to 53.9, hinting at reduced demand.
- Federal Reserve Chairman Jerome Powell raised concerns over weak labor markets and persistent inflation this past Tuesday, signaling potential rate cuts in upcoming meetings. However, he also expressed satisfaction with current policy directions, remaining open to future reductions if necessary.
- The White House announced that US companies will oversee Tiktok’s algorithms, with American representatives in six of its seven boards for US operations. Spokesperson Karoline Leavitt mentioned that the deal could finalize soon.
- The White House also revealed that Australian Prime Minister Anthony Albanese and President Trump will meet in Washington, DC, on October 20 to discuss the Orcas Nuclear Submarine Agreement.
- Australia’s preliminary S&P Global Composite PMI fell to 52.1 in September from 55.5, marking a three-month low. The manufacturing and services sectors both reported slowed growth amidst strong new business inflows and lower product orders.
- Current predictions show only a 20% chance of a rate cut in September, while November sees a 70% likelihood, as inflation remains above target levels, prompting caution from policymakers.
AUD Below 0.6600 EMA Barrier for 9 Days
The AUD/USD pair traded around 0.6590 this Thursday. Analyzing the daily chart reveals that the pair is under the nine-day exponential moving average (EMA), suggesting weaker short-term momentum. However, the 14-day relative strength index (RSI) stays just above the 50 mark, indicating a lingering bullish sentiment.
Initial support might be found at the 50-day EMA of 0.6552, aligned with a psychological barrier of 0.6550. If the pair dips below this range, it could weaken medium-term momentum, potentially pushing it towards the three-month low of 0.6414 recorded on August 21.
On the flip side, the first resistance level is the nine-day EMA at 0.6602. A breakthrough at this point would bolster short-term momentum, possibly guiding the AUD/USD pair closer to 0.6707, the peak reached on September 17.
AUD/USD: Daily Charts
Australian Dollar Prices Today
The table below presents the rate changes of the Australian Dollar (AUD) against major currencies for today, with AUD showing the most strength against the New Zealand dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.10% | -0.10% | -0.15% | -0.06% | -0.24% | -0.22% | -0.04% | |
| EUR | 0.10% | -0.01% | -0.07% | 0.03% | -0.12% | -0.13% | 0.05% | |
| GBP | 0.10% | 0.01% | -0.04% | 0.04% | -0.14% | -0.09% | 0.10% | |
| JPY | 0.15% | 0.07% | 0.04% | 0.08% | -0.11% | 0.09% | 0.12% | |
| CAD | 0.06% | -0.03% | -0.04% | -0.08% | -0.15% | -0.15% | 0.06% | |
| AUD | 0.24% | 0.12% | 0.14% | 0.11% | 0.15% | 0.31% | 0.17% | |
| NZD | 0.22% | 0.13% | 0.09% | -0.09% | 0.15% | -0.31% | -0.07% | |
| CHF | 0.04% | -0.05% | -0.10% | -0.12% | -0.06% | -0.17% | 0.07% |
The heatmap illustrates the rate of change across major currencies. The base currency is shown in the left column, while estimated currencies are arranged along the top row. For instance, selecting the Australian Dollar from the left and moving horizontally to the US Dollar presents the rate of change as AUD (base) to USD (quote).
