Australian dollar gains momentum on anticipation that the RBA will lag behind the global rate-cutting trend.

The Australian Dollar (AUD) is recovering from recent losses, trading near a six-month high of 0.6761 on Tuesday. The AUD’s rise is attributable to increased anticipation that the Reserve Bank of Australia (RBA) may lag in the global rate-cutting cycle or hike interest rates again in response to strong May inflation data.

The 10-year government bond yield in Australia has risen to near 4.4% as international investors seek security from political uncertainty.

Australia’s 10-year government bond rate has stayed stable at Around 4.4%, as high returns attract foreign cash from investors wanting to hedge against political uncertainty in the United States and Europe. The RBA’s June Meeting Minutes underscored policymakers’ emphasis on the need to be cautious against inflation concerns. They emphasized that a considerable increase in prices may entail significantly higher borrowing rates.

Fed Chair Powell will present “The Semiannual Monetary Policy Report” to the US Congress on Tuesday.

The AUDUSD pair rises as the US Dollar (USD) falls due to weak US job data, prompting traders to believe that the Federal Reserve (Fed) may cut interest rates sooner rather than later. The CME’s FedWatch Tool shows that rate markets expect a 76.2% chance of a rate cut in September, up from 65.5% just a week ago.

Federal Reserve Chairman Jerome Powell may provide “The Semiannual Monetary Policy Report” to the The US Congress meets on Tuesday. Powell might give a wide summary of the economy and monetary policy, with his written remarks made public before of his presentation on Capitol Hill.

Daily Market Movers: Australian Dollar strengthens due to hawkish attitude surrounding the RBA.

Australia’s Westpac Consumer Confidence fell by 1.1% in July, reversing the 1.7% increase witnessed in June. This is the seventh decrease in 2024, owing to persistent concerns about increasing inflation, rising interest rates, and a slowing economy.
US nonfarm payrolls (NFP) rose by 206,000 in June, following a 218,000 gain in May. This amount exceeded the market’s expectation of 190,000.
The US unemployment rate increased to 4.1% in June from 4.0% in May. Meanwhile, average hourly earnings declined by 3.9% year over year. in June from the previous figure of 4.1%, which was consistent with market expectations.
According to the Australian Bureau of Statistics on Thursday, Australia’s trade surplus for May was A$5,773 million ($3,868 million), less than the expected A$6,678 million and lower than the previous estimate of A$6,548 million.
Australia’s Retail Sales, a measure of consumer spending, climbed by 0.6% month on month in May, up from 0.1% the previous month. This statistic beat the market’s estimate of a 0.2% gain.
On Wednesday, Federal Reserve Bank of Chicago President Austan Goolsbee told BBC Radio that bringing inflation back to 2% will take time and that additional economic statistics are needed. However, on Tuesday, Fed Chair Jerome Powell stated that the central bank is getting back According to Reuters, inflation is on the decline.