Australian dollar continues to fall amid dismal economic statistics.
On Wednesday, the Australian Dollar (AUD) extends its losses for the second session, lingering around a critical level. The AUDUSD pair is under pressure due to weak Australian economic data, as well as a stronger US Dollar (USD) ahead of the Federal Open Market Committee (FOMC) policy announcement.
Australia’s AiG Industry Index was -9.9, while Building Permits fell 4.6%.
The AiG Industry Index and Building Permits (MoM) for September, released by Australia on Wednesday, suggested a decrease. Nonetheless, the Australian Dollar gained support on Monday was a good day for retail sales.
On November 7, the Reserve Bank of Australia (RBA) will announce its policy decision. Interest rates are expected to rise by 25 basis points at the forthcoming meeting, owing to higher inflation.
Positive US Treasury yields support the US Dollar’s gain ahead of the Fed announcement.
The US Dollar Index (DXY) is gaining ground for the second day, spurred by higher US Treasury yields as the market anticipates the US Federal Reserve’s (Fed) imminent policy announcement. While expectations are that the central bank will maintain its current monetary policy stance at its meeting on Wednesday, the prognosis for the December meeting is dependent on data-driven factors.
Investors will be watching the Federal Open Market Committee’s (FOMC) post-meeting speech intently, looking for key clues for market players measuring the probable trajectory interest rates.
Daily Market Movers: The Australian Dollar falls on poor economic data ahead of the Fed policy announcement.
Australia’s AiG Industry Index fell to 9.9 in September, down from 3.5 in August, while Building Permits (MoM) fell by 4.6%, compared to a market consensus of 1.3% rise, reversing a 7.0% increase in August.
Retail Sales (Month-on-Month) in Australia increased to 0.9% in September, exceeding market estimates of 0.3% and the prior result of 0.2%.
The Australian Consumer Price Index (CPI) increased by 1.2% in the third quarter of 2023, beating both the previous quarter’s 0.8% increase and the market consensus of 1.1% for the same time.
The Reserve Bank of Australia expressed increased concern about the impact of inflation. originating from supply shocks. Michele Bullock, Governor of the Reserve Bank of Australia, stated that if inflation remains above projections, the RBA will consider response policy actions. There is a discernible slowing in demand, and per capita consumption is falling.
The Chinese Purchasing Managers’ Index (PMI) data issued on Tuesday has raised concerns about the world’s second-largest economy’s poor economic state. Because Australia is China’s top trading partner, there is a greater chance that this move will affect the Australian Dollar.
China’s NBS Manufacturing PMI contracted unexpectedly in September, falling to 49.5.
China’s NBS Manufacturing PMI contracted unexpectedly in September, falling to 49.5 from 50.2 in July and falling short of the market consensus of 50.2.
The Chinese NBS Services PMI also fell, falling to 50.6 In September, the result was 51.7, compared to the expected figure of 51.8 and the previous reading of 51.7.
According to reports, the US and China have reached an agreement for Presidents Joe Biden and Xi Jinping to meet in November. This follows months of smart diplomatic efforts to repair relations.
The US Core Personal Consumption Expenditures Price Index (YoY) fell slightly to 3.7% from 3.8% previously. The monthly index, on the other hand, increased to 0.3%, in line with predictions and up from 0.1% earlier.
The University of Michigan Consumer Index outperformed expectations in October, posting a figure of 63.8 instead of the projected 63.0.
Investors will pay close attention to important indicators such as the US ADP.
Investors will pay close attention to important indicators such as the ADP Employment Change in the United States. , and the ISM Manufacturing PMI for October ahead of the Fed policy decision, with interest rates expected to remain at 5.5% in the forthcoming meeting on Wednesday.
