Australian dollar strengthened after the TD-MI Inflation Gauge increased by 0.3% month on month in October, up from 0.1% the prior month.
The Australian dollar (AUD) strengthened following the release of the Melbourne Institute’s Inflation Gauge data on Monday. The Reserve Bank of Australia (RBA) projected to keep the cash rate at 4.35% at Tuesday’s policy meeting, as underlying inflation, as measured by the trimmed mean, remains high. The expected hawkish stance of the RBA continues to support the Australian dollar, strengthening the AUDUSD pair.
The TD-MI Inflation Gauge increased by 0.3% month on month in October, up from 0.1% the previous month, the highest reading since July and ahead of the RBA’s November policy meeting. Annually, the gauge increased by 3.0%, up from the prior figure of 2.6%.
US Dollar may benefit from safe-haven flows if the US presidential election results are unknown on November 5.
The US Dollar (USD) fell after Friday’s release of lower-than-expected US October Nonfarm Payrolls (NFP) statistics. However, uncertainty over the outcome of the US presidential election on November 5 may spur safe-haven flows, which might boost the Greenback.
Traders are also looking ahead to the next US Federal Reserve (Fed) policy decision, which is expected to result in a modest 25 basis point rate drop this week. The CME FedWatch Tool now suggests a 99.6% probability of a The Fed reduced rates by a quarter-point in November.
Daily Market Movers: Australian Dollar Rises Following the Release of Key Domestic Data.
ANZ Australia Job Advertisements increased by 0.3% month on month in October, a significant decrease from the upwardly revised 2.3% growth in September. Despite the slower rise, this is the second straight month of increases.
On Sunday, China’s Commerce Minister Wang Wentao met with Australia’s Trade Minister, Don Farrell. China expressed hope that Australia will continue to improve its business climate and provide fair and equitable treatment to Chinese firms.
According to the last New York Times/Siena College survey, Vice President Kamala Harris leads in Nevada, North Carolina, and Wisconsin, while former President Donald Trump leads in Arizona by a razor-thin margin. The candidates are in close races in Michigan, Georgia, and Pennsylvania. From October 24 to November 2, the survey found that all matches in seven key states had a 3.5% margin of error.
The US Bureau of Labor Statistics (BLS) reported that October Nonfarm Payrolls climbed by only 12,000, following a revised September rise of 223,000 (down from 254,000), which fell far short of market estimates of 113,000. Meanwhile, the unemployment rate held unchanged at 4.1% in October, matching the average expectation.
Australia’s Producer Price Index increased by 0.9% quarter on quarter in Q3, following a 1.0% increase in the previous period and exceeding market expectations of a 0.7% gain. This is the seventeenth consecutive period of producer inflation. On a yearly basis, the PPI growth has slowed In Q3, growth slowed to 3.9% from 4.8% the prior quarter.
China’s Caixin Manufacturing Purchasing Managers Index (PMI) rose to 50.3 in October, up from 49.3 in September.
China’s Caixin Manufacturing Purchasing Managers Index (PMI) rose to 50.3 in October, up from 49.3 in September, and beyond market estimates of 49.7. China is a crucial trade partner for Australia, therefore changes in the Chinese economy could have a significant impact on Australian markets.
The US Personal Consumption Expenditures (PCE) Price Index showed that core inflation increased by 2.7% year on year in September. Additionally, initial jobless claims fell to a five-month low of 216,000 for the week ending October 25, indicating a strong labor market and lowering expectations for immediate Federal Reserve rate reduction.
The seasonally adjusted Australian Retail Sales grew by 0.1% month-over-month in September, falling short of the predicted 0.3% and slightly lower than 0.7% increase over the previous month. Retail Sales rose 0.5% in Q3, following a 0.3% dip in the previous quarter.
