Australian dollar falls as the RBA remains uncertain about future policy tightening.
The Australian Dollar (AUD) falls below a key level for the third consecutive day. Following the Reserve Bank of Australia’s (RBA) dovish rate statement. Furthermore, the AUDUSD pair is under pressure as the US Dollar (USD) recovers.
The National Australia Bank predicts another 25 basis point increase in February.
Australia’s central bank takes a data-driven strategy, especially when the Australian economy slows. Consumer expenditure has remained restrained in the face of continuing inflationary pressures. Australian Dollar investors are looking for more clues as to whether upcoming data will trigger additional trading. The Reserve Bank of Australia (RBA) has raised interest rates.
On Tuesday, the RBA hiked the Official Cash Rate (OCR) from 4.10% to a 12-year high of 4.35%. In line with mainstream predictions. The RBA’s decision appears to have been influenced by recent Consumer Price Index (CPI) data. Which revealed a significant 5.6% increase in the monthly Consumer Price Index (CPI).
Following the release of Q4 inflation figures, the National Australia Bank (NAB) predicts another 25 basis point boost in February. Furthermore, NAB predicts that rate reduction will not begin until November 2024.
PBOC Governor Pan Gongsheng mentioned successfully meeting the 5% growth target.
Pan Gongsheng, Governor of the People’s Bank of China (PBOC). Voiced optimism in a statement issued on Wednesday. Indicating that China’s economy is on a constructive path and that the 5% growth objective will be met successfully. Furthermore, the International Monetary Fund (IMF) has revised its forecast for China’s GDP growth, now expecting 5.4% growth in 2023, up from 5.0% previously, and 4.6% in 2024, exceeding the previous estimate of 4.2%. Given Australia’s position as China’s top trading partner, this news may provide support for the Australian Dollar (AUD).
According to sources, China’s State Council Head, Premier Li Qiang, has directed local officials in Guangdong Province to assist in arranging a rescue of Country Garden by the insurance company Ping An. On the contrary, a Ping An spokeswoman refuted the Reuters article.
The US Dollar Index (DXY) is gaining ground for the third day in a row as US Treasury yields retrace the previous day’s gains. Recent losses from the previous session, probably spurred by better risk sentiment. This shift in sentiment could be attributed to conjecture about the potential of the US Federal Reserve (Fed) ending interest rate hikes, particularly in light of the disappointing Non-Farm Payrolls data issued last Friday.
