Australian dollar keeps rising against the weaker US dollar.
The Australian Dollar (AUD) is still rising; on Tuesday, it extended its gains for a third straight session. The US Federal Reserve (Fed) members’ remarks regarding possible interest rate decreases by the end of 2024 appear to be contributing to the pair’s increased risk appetite. Furthermore, the positive Australian economic data may support the Aussie Dollar’s (AUD) gain.
Australian retail sales saw a 0.2% decrease before rising to 2.0%.
of Statistics showed that November’s seasonally adjusted retail sales (MoM) increased by 2.0% compared with the 1.2% predicted increase, marking a departure from the prior 0.2% fall. In addition, the monthly Building Permits decreased to 1.6% from 7.5% previously, vs a 2.0% predicted reduction.
On Wednesday, traders will be watching the Monthly Consumer Price Index data to get additional insight into the trajectory of interest rates set by the Reserve Bank of Australia (RBA). It is quite likely, though, that the RBA will hold off on cutting rates at its next meeting in February.
A stronger desire for risk depresses the US dollar.
Because US Treasury yields are declining, it appears that the US Dollar Index (DXY) is continuing to lose ground. Furthermore, the Fed members’ weaker remarks sparked a risk-on market environment that put pressure on the US dollar (USD).
Atlanta Fed President Raphael W. Bostic anticipates two quarter-point drops.
Fed President Raphael W. Bostic spoke Monday at the Atlanta Rotary Club, offering his thoughts on the state of the economy in 2024. Notably, he stated that the rate of inflation has decreased more than first thought and stated that he expected two quarter-point reductions by the end of 2024. Bostic expressed satisfaction with the rate level as it stands and stressed the need to give the Fed’s strict policy time to reduce inflation. He also said that the US is headed toward 2% inflation and that the objective is to stay on that course.
On Monday, South Carolina Bankers Association 2024 Community Bankers Conference heard remarks from US Fed Governor Michelle W. Bowman. She stated that if the policy rate is maintained at its current level, inflation may decrease much more. a while back. According to Bowman, the Fed’s current policy stance seems fairly restrictive, but if inflation eventually approaches the 2% target, it might be reasonable to cut the policy rate.
Daily Market Movers: Australian dollar gains on increased risk appetite.
The Composite PMI fell to 46.9 from the previous figure of 47.4. Australia’s Judo Bank Manufacturing PMI showed a modest contraction in manufacturing activity, declining to 47.6 in December from the previous reading of 47.8. The country’s Judo Bank Services PMI reported a reading of 47.1, falling short of market expectations that it would remain consistent at 47.6.
Zhongzhi Enterprise Group, a Chinese wealth manager, filed for bankruptcy liquidation in response to its enormous $64 billion in liabilities.
President of the Dallas Fed Lorie K. and 52.7 earlier. In contrast, the Services Employment Index dropped from 50.7 to 43.3.
