Australian dollar fell following the release of key economic data.

The Australian Dollar (AUD) is rising against the US Dollar (USD) following the announcement of better than expected Trade Balance statistics on Thursday. The Australian Bureau of Statistics recorded a trade surplus of 5,589 million for June, exceeding the expected 5,000 million but falling short of the previous estimate of 5,773 million.
The most recent inflation report, released on Wednesday, has dampened hopes that the Reserve Bank of Australia The RBA will raise interest rates again at its policy meeting next week. Economists have cautioned that further interest rate increases may undermine Australia’s economic recovery. Markets now estimate a 50% possibility of an RBA rate decrease in November, significantly earlier than previous forecasts of an April move next year. These developments placed pressure on the Australian dollar.

China’s Manufacturing PMI came in at 49.8 in July, lower than the projected 51.5 and previous 51.8 readings.

China’s Caixin Manufacturing Purchasing Managers Index (PMI) fell to 49.8 in July, below the expected reading of 51.5 and the previous reading of 51.8. Because both countries are close trading partners, economic developments in China can have a big impact on the Australian market.
The downside for the AUDUSD pair may be limited, as the US Dollar faces issues following the Federal Reserve’s The Fed decided to hold interest rates unchanged in the 5.25%-5.50% range during its July meeting on Wednesday. Traders will look for further direction from US economic data, including the ISM Manufacturing PMI and weekly Initial Jobless Claims, which are set to be released later on Thursday.

Daily Market Movers: The Australian dollar falls after critical economic data.

The Judo Bank Australia Manufacturing PMI increased to 47.5 in July 2024 from 47.2 in June, indicating a sixth consecutive month of worsening in manufacturing sector conditions, albeit at a slightly slower rate.
At a news conference, Federal Reserve Chair Jerome Powell emphasized that a rate cut in September is “on the table.” Powell noted that the central bank will actively watch the labor market and be vigilant for signals Reuters reports on a likely dramatic downturn.

ABS recorded a trade surplus of $5,589 million in June, compared to 5,000 million predicted and $5,773 million previously.

The Australian Bureau of Statistics (ABS) stated on Wednesday that the monthly CPI increased by 3.8% in the year to June, down from 4% in May. The quarterly CPI increased by 1% quarter on quarter and 3.8% year on year in the second quarter of the year. The RBA Trimmed Mean CPI, the central bank’s preferred gauge, increased by 3.9% YoY in Q2, compared to the expected and prior figure of 4.0%.
China’s NBS Manufacturing PMI rose to 49.4 in July, slightly higher than the projected 49.3 but lower than the previous 49.5. Meanwhile, the Non-Manufacturing PMI came in at 50.2, as expected.
Australia’s Building Permits (MoM) decreased by 6.5% in June, beating market estimates of a 3.0% drop. This follows. a 5.7% increase in May. Building Permits fell 3.7% year on year, compared to an 8.5% drop the year before.
According to a recent NAB Economics outlook, the Reserve Bank of Australia’s (RBA) cash rate is expected to remain constant at 4.35% until May 2025. Looking ahead, the NAB Economics team anticipates a 3.6% drop by December 2025, with further declines projected in 2026.
The Australian Prudential Regulation Authority (APRA) issued a media statement on Monday warning that arrears rates are slowly rising. Following their last quarterly review of local and foreign economic conditions, APRA announced that macroprudential policy settings will remain unchanged. These comments represent their ongoing assessment of both the domestic and global economic circumstances.