Australian dollar isrising higher due to increased risk sentiment.

On Monday, the Australian Dollar (AUD) outperformed the US Dollar (USD) for the third day in a row. The Australian Dollar pair rise might be ascribed to improving risk sentiment, as well as the Reserve Bank of Australia’s (RBA) hawkish stance on policy outlook.

The RBA is focused on potential inflationary threats and does not expect to decrease interest rates anytime soon.

On Tuesday, Australian Dollar investors will keenly watch the RBA Meeting Minutes as well as the People’s Bank of China’s (PBoC) Interest Rate Decision.
RBA Governor Michele Bullock remarked on Friday that the Australian central bank is focusing on potential inflationary threats and does not foresee any rate decreases in the short future. According to ABC News, Bullock stated that the RBA board believes it has found the appropriate balance between lowering inflation and maintaining stability in the current economic context.

The US dollar falls as Fed officials make dovish comments.

The US Dollar (USD) is under pressure as the prospect of a Federal Reserve (Fed) interest rate drop beginning in September grows. Retail Sales in the United States exceeded estimates last week, while the Producer Price Index (PPI) and Consumer Price Index (CPI) indicated that inflation is slowing. Furthermore, housing starts in July dropped to their lowest level since 2020. This week, every eye will Focus on Federal Reserve Chair Jerome Powell’s impending speech.

Daily Market Movers: Australian Dollar Advances as RBA May Adopt A Hawkish Position.

Australian Dollar (AUD) outperformed the US Dollar (USD) for the third day in a row. According to the Financial Times, President Mary Daly of the Federal Reserve Bank of San Francisco reiterated on Sunday that the US central bank should reduce borrowing prices gradually. Daly pushed back against experts’ concerns that the US economy is on the cusp of a dramatic recession, necessitating fast rate cuts.

Austan Goolsbee, President of the Federal Reserve Bank of Chicago, cautioned central bank authorities against extending a restrictive policy beyond what is necessary. While it is unclear whether the Fed will decrease interest rates next month, failing to do so could hurt the labor market As per CNBC.
On Friday, US Housing Starts fell by 6.8% in July to 1.238 million units, following a 1.1% increase in June. Meanwhile, the University of Michigan’s Consumer Sentiment Index increased to 67.8 in August, the first increase in five months, exceeding expectations and moving up from 66.4 in July.

US Census Bureau reported on Thursday that US retail sales increased by 1.0% month on month in July.

Australian Dollar (AUD) outperformed the US Dollar (USD) for the third day in a row.The US Census Bureau reported on Thursday that US retail sales increased by 1.0% month on month in July, a notable rebound from June’s 0.2% decrease. This figure exceeds the 0.3% projected growth. Furthermore, Initial Jobless Claims for the week ending August 9 were 227,000, exceeding the expected 235,000 but falling short of the previous week’s 234,000.

The People’s Bank of China (PBoC) stated on Thursday that it will renew the medium-term. The credit facility funds will mature on August 15th, later this month. According to Reuters, the central bank also lent CNY 577.7 billion (USD 80.9 billion) via seven-day reverse bond repurchase agreements at 1.7% in an open market operation, retaining the previous rate. Because China and Australia are close trade partners, any changes in the Chinese economy may have an impact on the Australian market.
The US headline Consumer Price Index (CPI) increased 2.9% year on year in July, slightly lower than the 3% increase in June and below market expectations. The Core CPI, which excludes food and energy, rose 3.2% year on year, slightly lower than the 3.3% increase in June but in line with market expectations.