Australian dollar rises ahead of Tuesday’s RBA policy meeting.
The Australian Dollar (AUD) recovers from recent losses ahead of the Reserve Bank of Australia (RBA) monetary policy decision on Tuesday.
The RBA is likely to keep the Official Cash Rate at 4.35% for the sixth consecutive meeting.
The RBA is widely expected to keep the Official Cash Rate (OCR) at 4.35% for the sixth straight meeting.
Traders will likely pay particular attention to RBA Governor Michele Bullock’s remarks, which could provide insight into the Board’s future policy path.
The AUD experienced issues with the US Dollar (USD) due to central banks’ fast policy revisions and growing concerns about a hard landing for the US economy. Furthermore, the second-quarter inflation data has reduced prospects of another RBA rate hike. Markets predict an RBA rate drop in November, far earlier than originally expected in April next year.
The US dollar falls as recent gloomy unemployment data raises the prospect of a Fed rate decrease in September.
The US dollar falls as expectations rise for a 50 basis point (bps) interest rate drop by the US Federal Reserve (Fed) in September. According to the CME FedWatch tool, the probability of this cut occurring at the September meeting is 74.5%, up from 11.4% a week earlier.
Daily Market Movers: Australian Dollar Advances Ahead of RBA Policy Decision.
The Australian Dollar (AUD) recovers from recent losses ahead of the Reserve Bank of Australia (RBA) monetary policy decision on Tuesday.
Mary Daly is President of the Federal Reserve Bank of San Francisco Daly indicated increased confidence on Monday that US inflation is approaching the Fed’s 2% objective, according to Reuters. Daly wrote that the “risks to the Fed’s mandates are becoming more balanced and that there is openness to the possibility of cutting rates in upcoming meetings.”
Moreover Chicago Fed President Austan Goolsbee indicated on Monday that the US central bank is ready to intervene if economic or financial conditions deteriorate. He pointed out: “We’re forward-looking about it, and so if the conditions collectively start coming in like that on the through line, there’s deterioration on any of those parts, we’re going to fix it.” According to Reuters.
The US ISM Services PMI increased to 51.4 in July, up from 48.8 the previous month. The index exceeded the market expects a 51.0 reading.
The Judo Bank Australia Composite PMI fell to 49.9 in July from 50.2 in June, dipping below the neutral 50 line for the first time since January. The Services PMI fell to 50.4 in July, from 51.8 in June. While this is the sixth straight month of increased services activity, the growth rate was minimal and the slowest seen in this sequence.
US nonfarm payrolls (NFP) increased by 114K from the previous month’s 179K (down from 206K).
In July, US nonfarm payrolls (NFP) increased by 114K from the previous month’s 179K (down from 206K). According to figures released on Friday, this total was lower than expected at 175,000.
In the same reported period, US average hourly earnings fell by 0.2% month on month, falling short of the market consensus of 0.3%. Every year, The figure fell to 3.6% from the prior measurement of 3.8%.
Furthermore On Tuesday, China’s Caixin Services Purchasing Managers Index (PMI) increased to 52.1 in July from 51.2 in June. The index topped the market’s forecast of 51.4. Caixin Manufacturing PMI reported a reading of 49.8 for July, below the expected reading of 51.5 and the prior reading of 51.8. Because both countries are close trading partners, fluctuations in the Chinese economy can have a considerable impact on the Australian market.
