Australian dollar decline could be limited by a likely RBA rate hike.

The Australian Dollar (AUD) fell for the sixth consecutive session on Monday. The AUD’s downside could be limited as strong employment numbers reflect tight labor market conditions and increase fears about a possible interest rate hike by the Reserve Bank of Australia (RBA). Investors are looking forward to the Australian manufacturing and services PMI statistics this week to assess the economy’s health.

The PBoC has lowered one- and five-year loan prime rates by ten basis points, to 3.35% and 3.85%, respectively.

The People’s Bank of China (PBoC) has lowered one- and five-year loan prime rates by ten basis points, to 3.35% and 3.85%, respectively. Because China and Australia are close trading partners, any changes in the Chinese economy could have an influence on Australian markets.

The drop in the US Dollar (USD) provides some support for the AUDUSD pair. The greenback is under pressure as expectations for a Federal Reserve (Fed) rate drop in September rise and concerns about the US labor market’s fragility linger. According to CME Group’s FedWatch Tool, markets now expect a 25-basis point rate drop at the September Fed meeting, up from 90.3% a week ago.

US President Joe Biden has announced that he will not seek re-election against former President Donald Trump.

According to Reuters, markets are adapting to a new US electoral scenario following President Joe Biden’s unexpected He announced on Sunday that he will not seek reelection against former President Donald Trump.

Daily Market Movers: Australian Dollar Improves Due to Hawkish Sentiment Around RBA.

China’s $715 billion hedge fund industry is bracing for additional pressure as new laws take effect next month. These new criteria will force funds to achieve greater asset thresholds, as well as more restrictive investment and marketing rules. As a result, some investment businesses are looking for more funding, according to Reuters.
President of the Federal Reserve Bank of New York, John Williams, remarked on Friday that the long-term trends that led to drops in neutral interest rates prior to the epidemic remain. Williams stated, “My own Holston-Laubach-Williams estimations for r-star in the US, Canada, and the According to Bloomberg, the Eurozone is roughly where it was prior to the outbreak.
The Australian Bureau of Statistics reported on Thursday that employment change grew by 50,200 in June from May, exceeding market expectations of 20,000.
According to Reuters, Sean Langcake, head of macroeconomic forecasting for Oxford Economics Australia, stated, “The current rate of employment growth suggests demand is resilient and cost pressures will persist.” We believe the RBA will maintain the course and leave interest rates on hold, but August is undoubtedly a live meeting.
According to Westpac’s assessment of a paper on inflation in Australia and the RBA, Australia projected to follow the same general disinflation trend as other countries due to substantially identical economic shocks.