Australian dollar rose to a new nine-month high of 0.6859 after RBA policy Decision.
The Australian dollar (AUD) rose against the US dollar (USD) as the Reserve Bank of Australia (RBA) opted to keep the Official Cash Rate (OCR) at 4.35%, citing solid labor market conditions and ongoing inflationary pressures. The RBA Board remains committed to restoring inflation to its target level, as it continues to rise and remain persistent. The Board is maintaining all options On the table.
the ANZ-Roy Morgan Australia Consumer Confidence Index increased by 0.8 points to 84.9 this week. Despite this uptick, Consumer Confidence has now been below 85.0 for 86 straight weeks. The index has risen 8.5 points year on year, from 76.4.
The US dollar faces headwinds as Fed policymakers anticipate further rate cuts in 2024.
The US Dollar (USD) may encounter hurdles as Federal Reserve (Fed) policymakers expect additional rate cuts totaling 50 basis points (bps) in 2024, following an aggressive 50 basis point decrease last week. Minneapolis Fed President Neel Kashkari said on Monday that he expects and supports more rate reduction in the coming year, according to Reuters.
Daily Digest Market Movers: Australian Dollar retains position due to hawkish sentiment surrounding the RBA.
Based on the CME FedWatch Tool, markets The Fed expected to subtract 75 basis points, bringing the rate down to 4.0-4.25% by the end of the year.
The S&P Global Composite Purchasing Managers Index (PMI) increased at a slower rate in September, reaching 54.4 from 54.6 in August. The Manufacturing PMI unexpectedly fell to 47.0, indicating contraction, while the Services PMI rose more than predicted to 55.4.
According to Chicago Fed President Austan Goolsbee, “many more rate cuts are likely needed over the next year, rates need to come down significantly.” Furthermore, Atlanta Fed President Raphael Bostic stated on Monday that the US economy is near to normal inflation and unemployment rates, and that the central bank’s monetary policy must “normalize” as well, according to Reuters. .
The People’s Bank of China (PBoC) pumped CNY 74.5 billion in liquidity into the banking sector through a 14-day reverse repo, with the interest rate reduced to 1.85% from 1.95%. Furthermore, the Chinese central bank pumped CNY 160.1 billion in liquidity through a 7-day reverse repo, keeping the rate constant at 1.7%.
Australian Treasurer Jim Chalmers is attempting to form a new monetary policy board at the Reserve Bank of Australia.
Australian Treasurer Jim Chalmers is attempting to form a new monetary policy board at the Reserve Bank of Australia, but he needs the Greens Party’s support to proceed. The Greens have declared that they will only support changes to the RBA if there is a commitment to lower interest rates.
Australia’s Judo Bank Composite PMI decreased to 49.8 in September from 51.7 in August, showing a contraction in business activity as Slower growth in the services sector was insufficient to offset a deeper contraction in industrial production. The Services PMI fell to 50.6 in September from 52.5 the previous month, while the Manufacturing PMI fell to 46.7 from 48.5 in August.
Commonwealth Bank (CBA) has shifted its projection for the first Reserve Bank of Australia rate drop by 25 basis points from November 2024 to December 2024. This shift follows a strong employment rate and the central bank’s sustained “hawkish” attitude, according to Yahoo Finance.
Australian employment change was 47.5K in August, down from 48.9K (updated from 58.2K) in July but still significantly above the average prediction of 25.0K. In August, the unemployment rate stayed unchanged at 4.2%, which met both expectations. and the previous month’s level, according to figures from the Australian Bureau of Statistics (ABS).
The Reserve Bank of Australia opted to keep the Official Cash Rate at 4.35% in September.
The Australian dollar (AUD) rose against the US dollar (USD) as the Reserve Bank of Australia (RBA) opted to keep the Official Cash Rate (OCR) at 4.35%, citing solid labor market conditions and ongoing inflationary pressures. The RBA Board remains committed to restoring inflation to its target level, as it continues to rise and remain persistent. The Board is maintaining all options On the table.
Michele Bullock, Governor of the Reserve Bank of Australia (RBA), underlined that considering rate decreases is premature given the continually high inflation. Additionally, RBA Assistant Governor Sarah Hunter stated that, while the labor market is tight, wage growth appears to have peaked and is projected to slow further.
