Australian dollar remains weak as the market expects the RBA to adopt a dovish posture.
On Friday, the Australian Dollar (AUD) fell for the second consecutive session. However, market activity is expected to be muted due to the minimal trade on Good Friday. Meanwhile, the US Dollar (USD) gains as recent data show an annualized economic expansion in the United States (US). Fueled by consumer spending. This development weakens the AUDUSD pair.
Australia’s central bank may consider lowering interest rates in the second half of 2024.
The Australian Dollar had challenges amid weakening consumer inflation expectations. Retail sales figures for Australia. These indicators elevated the prospect of an interest rate drop by the Reserve Bank of Australia (RBA) in the later half of 2024. Furthermore, the weaker Australian Monthly Consumer Price Index, released on Wednesday, supported this prediction.
The US dollar gains as fresh data suggests that the Fed may defer enacting rate reduction in the near future.
The US Dollar Index (DXY) appears to be on track to extend its winning streak. Supported by hawkish comments from a Federal Reserve (Fed) official. Which boosted the Greenback. Fed Governor Christopher Waller’s comments on Wednesday hinted. That the central bank may postpone interest rate decreases due to strong inflation statistics. Investors are now waiting for the US Personal Consumption Expenditures (PCE) report on Friday, which serves as the Fed’s preferred inflation indicator. To provide additional insight and direction.
Daily Market Movers: The Australian Dollar declines as RBA may adopt a dovish attitude.
In March, Australia’s consumer inflation expectations were 4.3%. A little reduction from the previous month’s 4.5% increase.
Seasonally adjusted Australian retail sales increased by 0.3% month on month in February. Falling short of the predicted 0.4% and the preceding 1.1%.
Australia’s Monthly Consumer Price Index (YoY) increased by 3.4% in February. Remaining consistent with recent levels but slightly lower than the expected 3.5%.
The Australian government has vowed to support a minimum wage hike in line with inflation this year. Recognizing the persistent challenges that low income people confront as living costs rise.
At the Boao Forum for Asia (BFA), China’s top legislator, Zhao Leji, underlined China’s commitment to inclusive economic globalization. He said that China rejects unilateralism and protectionism. in all its manifestations, and is committed to closely coordinating its development with that of other countries.
Federal Reserve Board Governor Christopher Waller believes there is ‘no rush’ to decrease interest rates.
Despite persistent inflation figures, Federal Reserve Board Governor Christopher Waller believes there is ‘no rush’ to decrease interest rates.
Atlanta Fed President Raphael Bostic stated that he expects only one rate decrease this year, warning that lowering rates early could cause more disruption.
In the fourth quarter of 2023, US GDP increased by 3.4% on an annualized basis. The market expected a 3.2% gain.
The US Gross Domestic Product Price Index rose by 1.7% in Q4, as projected.
Core Personal Consumption Expenditures (QoQ) came in at 2.0% in the fourth quarter, slightly lower than the projected and prior reading of 2.1%.
US Initial Unemployment Claims In the week ending March 22, the number dipped to 210K, despite expectations that it would rise to 215K from 212K.
