Australian Dollar fall may be limited by the RBA’s hawkish attitude on interest rate direction.
On Monday, the Australian Dollar (AUD) fell for the third consecutive session. However, the AUDUSD pair’s fall may be limited due to the Reserve Bank of Australia (RBA) hawkish stance. RBA Governor Michele Bullock stated during her most recent news conference that the Board considered probable rate hikes while dismissing the possibility of rate reduction in the near future, according to ABC News.
The US dollar remains stable as Fed officials postpone the first interest rate drop in 2024.
The US dollar (USD) remains constant as Federal Reserve (Fed) officials postpone the first interest rate drop this year. According to the CME FedWatch Tool, investors are now pricing in approximately 65.9% chance of a Fed rate drop in September, down from 70.2% a week ago.
Daily Market Movers: The Australian dollar falls due to aggressive Fed.
The ASX 200 Index dipped below 7,750 on Monday, giving up some of its gains from the previous session. This slump follows a negative lead from Wall Street, where Nvidia and other AI-related tech stocks saw severe selling following a good surge.
The People’s Bank of China injected 50 billion yuan in seven-day reverse repos, keeping the rate at 1.8%. Any changes in the Chinese economy. China and Australia are close trading partners, thus this could have an influence on the Australian economy.
Investors are likely to exercise caution ahead of this week’s Australian inflation report. Markets have dramatically decreased their expectations for an RBA rate drop this year, with no lowering expected until April next year.
On Friday, the June US Composite PMI beat expectations, rising to 54.6 from 54.5 in May. This statistic represented the greatest level since April 2022. The manufacturing PMI rose to 51.7 from 51.3, beating the expectation of 51.0. Similarly, the Services PMI improved to 55.1 from 54.8 in May, exceeding the consensus estimate of 53.7.
According to a Reuters article, Fed Reserve Bank of Minneapolis President Neel Kashkari commented on Thursday that it will likely take a year or two to return inflation to 2% That it will likely take a year or two to return inflation to 2%.
