Australian Dollar is struggling to recoup its recent losses.
On Wednesday, the Australian Dollar (AUD) aims to end a two-day losing skid. The AUDUSD pair, on the other hand, is under pressure due to risk-off sentiment and a higher US Dollar (USD). Furthermore, the pair fell following the Reserve Bank of Australia’s (RBA) interest rate announcement on Tuesday.
The RBA’s decision to maintain policy rates steady might put pressure on the Australian Dollar.
In the most recent policy meeting, Australia’s central bank chose to preserve the status quo, keeping the existing interest rate at 4.10% unaltered. This move may put pressure on the Australian dollar. . Nonetheless, a rate rise is possible, with projections pointing to a top of 4.35% before the end of the year. This forecast corresponds to the steady rise in inflation over the objective.
Higher US Treasury rates support the US dollar, as do positive US job figures.
The US Dollar Index (DXY) reached an 11-month high as a result of positive US job statistics and higher US Treasury rates. US JOLTS Job Openings topped estimates, causing US yields to rise. The 10-year US Treasury yield has risen to its highest level since 2007.
Furthermore, market concern about the US Federal Reserve’s (Fed) interest rate trajectory is contributing to the Greenback’s bullish mood.
Daily Market Movers: The Australian Dollar falls while the US Dollar rises, prompting market caution.
The RBA elected to keep the Official Cash Rate unchanged. (OCR) at 4.10%, in line with market forecasts, putting pressure on the Australian Dollar.
Michele Bullock, the newly appointed governor of the RBA, stated in her inaugural monetary policy statement that more tightening of monetary policy may be required.
Bullock stated that recent data point to inflation returning to the desired range. While inflation in Australia has peaked, it remains high and is anticipated to remain so for some time.
On Tuesday, the 10-year US Treasury yield reached 4.81%, its highest level since 2007.
US JOLTS Job Openings increased to 9.61M in August, up from 8.92M in July. The market anticipated a drop to 8.80M numbers.
Loretta Mester, President of the Cleveland Federal Reserve, indicated on Tuesday that she If the current economic scenario maintains, the Fed is likely to support an interest rate rise at the next meeting.
Atlanta Fed President Raphael Bostic commented on the Federal Reserve’s policy stance, saying, “I am not in a hurry to raise, and I am not in a hurry to reduce either.” He stressed patience, emphasizing that there is no need for additional action at this time.
Traders are looking forward to the publication of US employment data, which includes the ADP report on Wednesday and the Nonfarm Payrolls report on Friday. On Thursday, the Australian Trade Balance will be examined.
