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RBA

Australian dollar eyes GDPThe Australian dollar is drifting on Tuesday. In the North American session, AUD/USD is trading at 0.6461, down 0.20% on the day at the time of writing. Australia’s economy is expected to improve in the third quarter, with a market estimate of 0.4% q/q. This follows a disappointing gain of 0.2% in Q2, the weakest growth in five quarters, as household spending declined. On a  yearly basis, GDP is expected to tick up to 1.1% compared to 1% in the second quarter. The Australian economy continues to groan under the weight of high interest rates, which the Reserve Bank of Australia implemented in order to tame high inflation. Now that inflation has come down, there is pressure on the RBA to respond with lower rates. The RBA has become an outlier as most major central banks are in the middle of an easing cycle while the RBA has held rates for over a year. RBA Governor Bullock has remained hawkish, reiterating that underlying inflation is too high for the RBA’s liking and that a rate hike is not off the table. Headline inflation has fallen to 2.1%, well within the RBA’s target bank of 2%-3%, but the RBA remains concerned about underlying inflation, which  accelerated in October to 3.5%, up from 3.2% a month earlier. The market isn’t buying the warning of higher rates and expects the next rate move to be a cut sometime in mid-2025. That means that consumers will have to grapple with high rates for months, barring an unexpected fall in underlying inflation. In the US, Federal Reserve Governor Christopher Waller said on Monday that he is leaning toward a cut in December but could change his mind if inflation surprised on the upside. The US releases November CPI one week prior to the rate announcement and the release will be a key factor as to whether the Fed cuts or maintains interest rates. AUD/USD Technical AUD/USD tested resistance at 0.6478 earlier. Next, there is resistance at 0.6514 0.6441 and 0.6405 are the next support levels
by OANDA
AUDUSD-The first interest rate cut is postponed until next year?The AUDUSD currency pair is below the EMA200 and EMA50 in the 4H timeframe and is moving in its downward channel. In case of a valid failure of the channel ceiling, we can see the supply zones and sell within those zones with the appropriate risk reward. The loss of the drawn support range will pave the way down for this currency pair. The Australian government’s plan to reform the central bank by splitting its board into two divisions is close to becoming law.Prime Minister Anthony Albanese’s administration is pushing through dozens of bills in the Senate during the final parliamentary session of the year to implement these major reforms. In this process, the government and the minority Green Party reached a last-minute agreement to revive stalled legislation. Previous negotiations had failed because the Greens demanded an immediate interest rate cut by Treasurer Jim Chalmers, which critics argued could undermine the central bank’s independence. Now, with sufficient political support, these long-awaited reforms are set to be enacted soon, potentially reshaping Australia’s monetary and economic policies. Australia’s four major banks—ANZ, Commonwealth Bank, National Australia Bank, and Westpac—have adjusted their forecasts for when the Reserve Bank of Australia (RBA) will make its first interest rate cut. Westpac and NAB now expect this to occur in May 2025, while CBA and ANZ continue to anticipate a February 2025 cut, albeit with caution. The next RBA meeting is scheduled for December 9–10, 2024. S&P Global Ratings, in its outlook for the global economy in Q1 2025, stated, “Risks are increasing as the new U.S. administration’s policies are likely to heighten inflationary pressures and tighten financial conditions.” The agency predicts global GDP growth of about 3% in 2025, with U.S. economic growth dropping below 2% and China moving toward 4% growth. According to Bloomberg, economists anticipate that China’s exports will hit a record high this year as international customers place orders early to avoid potential tariffs threatened by Trump. Meanwhile, Australia, known as a safe haven for heavy-duty pickup trucks, is set to experience its most significant automotive shift in years, with new models arriving, including the first off-road hybrid vehicle from China’s BYD. Australia, famous for its love of SUVs and petrol-fueled pickups, remains one of the laggards in adopting electric vehicles. According to the Australian Automobile Association, EV sales in Q3 dropped by 25% compared to Q2, accounting for just 6.6% of the market—the lowest share since 2022. However, the arrival of new hybrid models like the BYD Shark 6 could transform Australia’s automotive market and boost demand for electric and hybrid vehicles. Meanwhile, a spokesperson for China’s Ministry of Commerce reiterated the country’s opposition to unilateral U.S. tariffs. He urged the U.S. to adhere to World Trade Organization (WTO) rules and emphasized that imposing tariffs would not solve America’s economic challenges. China’s stance against unilateral tariff increases, including those threatened by Trump, remains consistent. On the other hand, the U.S. economy grew at a robust pace in Q3, primarily driven by a significant surge in consumer spending as inflation continued to ease. GDP rose at an annual rate of 2.8% during this period. Consumer spending, the primary engine of economic growth, increased by 3.5%, marking the highest rate this year. According to the GDPNow model, the real GDP growth rate (seasonally adjusted annual rate) for Q4 2024 was revised to 2.7% on November 27, up from 2.6% on November 19. Following the release of the U.S. Bureau of Economic Analysis’ Personal Income and Outlays report, real personal consumption expenditures growth for Q4 was revised upward from 2.8% to 3.0%.
Short
by Ali_PSND
GBPAUD - England will continue its economic growth?!The GBPAUD currency pair is located between EMA200 and EMA50 in the 4H timeframe and is moving in its downward channel. In case of failure of this channel, we can see the supply zone and sell within that zone with appropriate risk reward. Continued movement in the channel will pave the way for this currency pair to go down to the demand zones. GBPAUD buy positions can be looked for in two demand zones. Donald Trump, the U.S. president-elect, has threatened to impose a 10% tariff on all Chinese imports starting January 20, the day his presidency begins. In response, China’s embassy in Washington stated on Monday that neither the United States nor China would win a trade war. Liu Pengyu, the embassy spokesperson, said in a statement: “China believes that economic and trade cooperation between China and the United States is inherently mutually beneficial.” In Australia, the monthly CPI index remained unchanged at 2.1% year-on-year in October, falling short of expectations for an increase to 2.5%. This marks the lowest annual inflation rate since July 2021. Core inflation indicators provided mixed signals, with CPI excluding volatile items and holiday travel dropping from 2.7% to 2.4% year-on-year. However, the trimmed mean CPI, the preferred measure of core inflation, rose from 3.2% to 3.5%, reflecting persistent inflationary pressures in certain sectors. Michelle Marquardt, head of price statistics at the Australian Bureau of Statistics, highlighted that declines in electricity and fuel prices had a significant impact on annual CPI. She emphasized the importance of core inflation measures like the trimmed mean in offering deeper insights into inflation trends amid significant price fluctuations. In the UK, according to the latest Reuters poll, house prices are expected to rise by 3.1% in 2025 and 4.0% in 2026. These figures show slight adjustments compared to September’s survey. In London, house prices are projected to grow by 3.0% in 2025 and 4.0% in 2026. October inflation data for the UK exceeded expectations. Headline inflation rose to 2.3%, while core inflation unexpectedly increased to 3.3%, and services inflation reached 5.0%. Rising energy costs and a slowdown in declining goods prices were the primary drivers of this inflation increase. The Bank of England is expected to keep interest rates unchanged in December and cut rates by 25 basis points at its February meeting next year. Overall, the UK’s economic performance appears slightly better than the Eurozone, though it still struggles to achieve sustainable growth and economic recovery. The UK’s manufacturing PMI dropped to 48.6 in November, with the new orders component falling to 47.0. The services PMI also declined to 50.0. These figures suggest that the Bank of England faces challenges not only in controlling inflation but also in improving economic activity, production, and employment. As a result, the central bank is likely to adopt a cautious and measured approach in its policy decisions, at least for the next month.
Long
by Ali_PSND
GBPAUD: Australia will continue its economic growth?!The GBPAUD is below the EMA200 and EMA50 in the 4H timeframe and is moving in its medium-term bullish channel. In case of upward correction, we can see the supply zone and sell within that zone with appropriate risk reward. The breaking of the upward trend line will pave the way for this currency pair to fall to the demand zone. In this demand zone we can open GBPAUD buy positions. The Fitch rating agency has reaffirmed Australia’s AAA credit rating with a stable outlook, even as it highlighted the country’s higher debt levels compared to similarly rated peers. Fitch stated that Australia remains committed to fiscal sustainability rules, which have contributed to nearly 30 years of economic expansion before the pandemic. Jim Chalmers, Australia’s Treasurer, warned that a potential victory for Donald Trump in the U.S. elections could create short-term economic pressures for Australia, manifesting as lower production and increased inflationary pressures. Chalmers also mentioned that Australia is prepared to face potential challenges from a Trump administration. Chalmers, revealing Treasury’s modeling results that took a Trump victory into account, indicated that there could be a slight decrease in output and additional price pressures. However, the characteristics of Australia’s economy provide it a relative advantage compared to other countries. Meanwhile, Barclays has revised its forecast and now expects the Bank of England (BOE) to keep the bank rate unchanged in December. This change is due to BOE’s more cautious tone and its emphasis on uncertainty and gradual policy moves. Barclays also anticipates that the BOE will reduce interest rates in several 25-basis-point increments over the next year, ultimately bringing the terminal rate to 3.50%. Bloomberg reported that Rachel Reeves, the UK’s Chancellor of the Exchequer, is facing serious challenges just 10 days after presenting her first budget. Rising borrowing costs and weaker economic growth have strained her £9.9 billion fiscal space set aside for her “stability” rule, which mandates that day-to-day expenses should be covered by taxes by 2029-30. Reeves now risks falling short of the Labour Party’s election promise to hold only one fiscal event per year and may need to secure additional funding before the 2025 budget.
Short
by Ali_PSND
Japan’s consumer spending slips, yen extends gainsThe Japanese yen has posted gains on Friday. In the European session, USD/JPY is trading at 152.38, down 0.36% on the day. The yen has taken traders on a roller-coaster ride this week, plunging 2% on Wednesday and rebounding on Thursday with a 1.1% gain. Japan’s household spending fell by 1.1% y/y in September, following a 1.9% drop in August. This was better than the market estimate of -2.1%. Household spending has declined in 10 of the past 12 months, as consumer confidence fell in October and inflation is relatively high. On a monthly basis, household spending decreased 1.3%, after a strong 2% gain in August. This beat the market estimate of 0.7%. The weak yen is also weighing on consumers, who are being squeezed as their purchasing power has fallen. The yen fell to three-month lows this week against the dollar and if the downswing continues, the Bank of Japan will be under pressure to respond with a rate hike. Although consumers are holding tight on the purse strings, wages have been rising and the BoJ is hopeful that will translate into increased consumer spending and demand-driven inflation. Consumer spending makes up more than half of the economy and BoJ is unlikely to make further rate hikes until it sees stronger consumer spending. The markets don’t expect a rate hike until early 2025. The Federal Reserve didn’t surprise anyone with a 25-basis point rate cut on Wednesday. This is the second cut in the easing cycle after an oversized 50-bp chop in September. The vote was unanimous and unlike the Bank of Japan, the Fed has been transparent and telegraphed its plan to cut rates ahead of the meeting. The Fed is expected to continue cutting rates in the coming meeting and will be keeping a close eye on inflation and employment reports. USD/JPY faces resistance at 153.44 and 154.17 152.16 and 151.43 are the next support levels
by OANDA
RBA Holds, BoE Expected to Cut in Volatile Week Two major central bank decisions this week join the U.S. election as key events for markets, with interest rate reductions from the Reserve Bank of Australia and the Bank of England being considered. The RBA will announce its decision Tuesday (local time), with economists polled by Reuters forecasting no change to the current 4.35% cash rate. Persistently robust economic activity and sticky core inflation are thought to be keeping the central bank cautious. All major Australian banks—ANZ, CBA, NAB, and Westpac—expect the RBA to hold steady through year-end, projecting the first rate cut to come in February 2025. Meanwhile, the BoE is anticipated to lower its Bank Rate by 25-basis points on Thursday (local time), bringing it to 4.75%, according to a Reuters poll. Last week Britain's finance minister Rachel Reeves unveiled an unexpectedly large increase in borrowing and public spending, which prompted the Office for Budget Responsibility to raise inflation forecasts. However, analysts suggest that these fiscal moves won’t likely disrupt the BoE’s path toward a rate cut this week.
by BlackBull_Markets
Aussie:Elliott Wave Structure Suggests More Downside After RallyThe RBA stands out with a potentially different approach compared to other central banks, as inflation in Autralia remains relatively high, making rate cuts this week less likely. This could support a rally in the Aussie, which aligns with the Elliott Wave pattern showing wave A in its final stages, with a strong five wave sell-off from September highs. A bounce could develop then, especially if the HSI remains stable or even moves higher this week. However, once the Aussie shows a solid recovery, be awre for a potential resumption of the downtrend, ideally from around 0.67 resistance; from the area of a former wave four. For those trading this pair, it’s worth waiting for a bounce before entering on the short-side. Grega
Short
by ew-forecast
1
AUDNZD strong bullish expectations for next periods AUDNZD RBA coming in new week, technically what can see on medium and long term AUD having strong bullish expectations. I watch on AUDNZD like "speacial" pair, what we are can see in last periods we have and changes on EUR and USD rate cut are start going lower, believe that will same have impact and on AUDNZD trend, expecting now stronger bullish changes on this pair for next medium and long term periods. This period for me is highly good for entry long. Currently price on strong trend line. And +bouncing from this week on strong weekly zone (1.08100). Expectations for RBA are bullish boost for AUD. TP: 1.12000 (300) TP2: 1.14000 (500)
Long
by DepaTrading
2
Aussie dollar strengthens as RBA moves opposite with Fed The RBA is less likely to cut rates as Australia's labor market remains tight. Australia's Aug Unemployment Rate held steady at 4.2%, while labor participation surged to a record high of 67.1%. Australian Treasurer Jim Chalmers emphasized that the increasing number of jobs and opportunities for Australians is a very encouraging development. The RBA also clarified that inflation could continue to decrease if the Unemployment Rate increases further. As the RBA continues to uphold its hawkish stance while the Fed declares a 0.50% rate cut, the Aussie dollar may persist in its upward trajectory. AUDUSD extended its uptrend, breaching the psychological resistance at 0.6800. The price rose above both EMAs, while EMA21 widened the gap with EMA78, sending a bullish signal. If AUDUSD sustains its uptrend while holding above EMA21, the price could gain upward momentum toward the 0.6870 high. Conversely, if AUDUSD fails to hold above EMA21 and breaks the support at 0.6730, the price may fall further to the 0.6640 level.
by inkicho_exness
Aussie dollar strengthens as RBA moves opposite with Fed The RBA is less likely to cut rates as Australia's labor market remains tight. Australia's Aug Unemployment Rate held steady at 4.2%, while labor participation surged to a record high of 67.1%. Australian Treasurer Jim Chalmers emphasized that the increasing number of jobs and opportunities for Australians is a very encouraging development. The RBA also clarified that inflation could continue to decrease if the Unemployment Rate increases further. As the RBA continues to uphold its hawkish stance while the Fed declares a 0.50% rate cut, the Aussie dollar may persist in its upward trajectory. AUDUSD extended its uptrend, breaching the psychological resistance at 0.6800. The price rose above both EMAs, while EMA21 widened the gap with EMA78, sending a bullish signal. If AUDUSD sustains its uptrend while holding above EMA21, the price could gain upward momentum toward the 0.6870 high. Conversely, if AUDUSD fails to hold above EMA21 and breaks the support at 0.6730, the price may fall further to the 0.6640 level.
by inkicho_exness
RBA can shine if people dine at Burger KingRestaurant Brands Asia Ltd. engages in the management of restaurants. It offers burgers, breakfast, cravers, beverages, and desserts. Restaurant Brands Asia Ltd. CMP is 112.99. The positive aspects of the company are Company with Low Debt, Company with Zero Promoter Pledge, MFs increased their shareholding last quarter, Strong cash generating ability from core business - Improving Cash Flow from operation, Growth in Net Profit with increasing Profit Margin and Strong Momentum: Price above short, medium and long term moving averages. The Negative aspects of the company are negative Valuation (P.E. = -26), Stocks Underperforming their Industry Price Change in the Quarter, Book Value Per Share deteriorating for last 2 years and Inefficient use of shareholder funds. Entry can be taken after closing above 114 Targets in the stock will be 117, 119 and 123. The long-term target in the stock will be 127 and 133. Stop loss in the stock should be maintained at Closing below 103 or 98 depending on your risk taking ability. Disclaimer: The above information is provided for educational purpose, analysis and paper trading only. Please don't treat this as a buy or sell recommendation for the stock. We do not guarantee any success in highly volatile market or otherwise. Stock market investment is subject to market risks which include global and regional risks. We will not be responsible for any Profit or loss that may occur due to any financial decision taken based on any data provided in this message.
NSE:RBALong
by Happy_Candles_Investment
AUD/USD: Watch for a Reversal with RBA Decision AUD/USD continues to hit new yearly highs as risk sentiment improves following the FOMC’s 50-basis-point rate cut last week and today’s Reserve Bank of Australia (RBA) meeting, where no rate change is expected. However, a dovish tilt from the RBA meeting notes could shift the pair’s momentum, with the 200-Day Moving Average acting as a key level to watch. Also, keep an eye on the RSI, which is nearing the overbought zone at 70 on the daily chart. Beyond the RBA decision later today, Australian inflation data is set for release tomorrow, with headline inflation expected to drop sharply from 3.5% to 3.1%.
by BlackBull_Markets
AUD/USD rises to eight-month high, RBA nextThe Australian dollar has started the week with gains. AUD/USD touched a high of 0.6850, its highest level this year. In the North American session, the Australian dollar is trading at 0.6842, up 0.51% on the day. The Reserve Bank of Australia is expected to maintain the cash rate at 4.35% at Tuesday’s meeting. The RBA has held rates since November, making it an outlier among the major central banks, most of which have lowered interest rates. Underlying inflation is at 3.9%, much higher than the target of between 2% and 3%. Australia releases August CPI on Wednesday, with headline CPI expected to fall to 2.8%, compared to 3.5% in July. The RBA was more cautious than other central banks during the rate-tightening cycle and its cash rate peaked one percent below the Federal Reserve. The flip side is that the RBA has been less aggressive as far as cutting rates and Governor Bullock has said that there are no plans to cut before February 2025. The RBA’s rate hikes have chilled economic growth as consumption has fallen sharply and GDP grew by only 1% in the second quarter. Still, the labor market has remained robust and unemployment is at 4.2%, as large-scale immigration has boosted the economy and helped avoid a recession. In the US, today’s PMIs had no impact on AUD/USD. The manufacturing PMI slipped to 47.0 in September, down from 47.9 in August and well off the market estimate of 48.5. This was the lowest level in thirteen months as new orders fell sharply. The services sector is in better shape as the PMI ticked lower to 54.4, compared to 54.6 in August and slightly above the market estimate of 54.3. 0.6865 has held in resistance since December 2023. Above, there is resistance at 0.6923 0.6781 and 0.6723 are the next support levels
by OANDA
1
AUDCHF: RBA and SNB Can Send Pair even higherIn this article, I will take a closer look at AUD/CHF, and the reason for focusing on this pair is the potential divergence between the RBA and the SNB, which could push the pair even higher. The RBA is expected to hold rates at 4.35%, as inflation slightly increased year-on-year to 3.8% in the second quarter, up from 3.6% in the first quarter. On the other hand, the Swiss National Bank (SNB) may once again cut rates, which could help keep AUD/CHF in an uptrend. Looking at the wave structure, we have seen a very nice ABC setback down to 0.5605, which ended in mid-September. Ideally, we are now in a new impulsive phase. However, for this current leg up to be completed, we need to see five waves up, and based on the subdivisions, that is not the case yet. In fact, a wave four correction could appear in the next few days, presenting an opportunity to join the uptrend. Support can be found around the 0.5780 area, which also aligns with the previous wave B swing area. The price should not fall below 0.5729, otherwise the wave count will become invalid.
Long
by ew-forecast
AUD/USD climbs on Aussie job data, Fed rate cutThe Australian dollar has posted sharp gains on Thursday. AUD/USD rose as much as 1% before paring most of those gains. In the North American session, the Australian dollar is trading at 0.6792, up 0.41% on the day. Australia created 47.5 thousand jobs in August, close to the revised 48.9 thousand in July and crushing the market estimate of 25 thousand. The gains were all part-time positions as full-time jobs actually declined by 3.1 thousand. Still, investors gave a thumbs-up and the Australian dollar is up sharply today. The unemployment rate remained steady at 4.2%, in line with market expectations. The Reserve Bank of Australia remains an outlier among the major central banks as it is yet to lower rates. The RBA has maintained rates at 4.35% since November but its “higher for longer” stance has not brought down inflation as much as expected. Inflation has dropped to 3.5% but that is still higher than the inflation target range of between 2 and 3 percent. The RBA meets next Wednesday, a day before the August inflation report and is expected to maintain rates. In one of the most anticipated rate meetings in recent memory, the Federal Reserve surprised the markets with an oversize cut of 50 basis points. The markets were unsure right up to decision time whether the Fed would go with a modest 25 bps cut or the large 50 bps cut. In the end, the Fed opted for the deeper cut in a near-unanimous decision (11 of 12 members voted in favor). The message from the Fed was that it is confident that inflation will remain sustainably near the 2% target and that the weak labor market was in need of strong relief. In his press conference, Fed Chair Powell tried to assure the markets that the US economy was in good shape and that today’s move was not a signal that further 50 bps cuts were on the way. AUD/USD is testing resistance at 0.6798. Above, there is resistance at 0.6862 0.6751 and 0.6687 are the next support levels
by OANDA
AU Bears "Head" Down to Target .6570Here I have AUD/USD on the Daily Chart! From Friday's High @ .67672 to its Low @ .66597, we can see we get the Confirmation of a strong reversal pattern with the Break of the Neckline of the Head & Shoulders! Now what I'd like to see off the same High and Low of Friday is Price give us a 38.2% Retracement of the Low & Pullback to test the Neckline for potential Sell Entries. ( .67008 - .6697 ) Swing High of Head to Neckline = 126.9 Pips Neckline - 126.9 = .6570 (Target) Fundamentals: AUD's undoing comes from a mix of a rise in Unemployment to 4.2% and Retail Sales ending August coming in @ 0% With the horrible run of jobs reports for the USD to start September, it managed to recover to end the week and give the idea that a 50 bps Rate Cut is less likely sitting at a 30% change and a 25 bps Rate Cut more likely at a 70% chance at the Sept 18th meeting. -RBA Interest Rate sits @ 4.35% -Fed Interest Rate sits @ 5.5% This upcoming week will be VERY news heavy for USD seeing as there is: -Core CPI, CPI m & y on Wednesday, Sept. 11th -Core PPI/ PPI m/m & Unemployment Claims on Thursday, Sept 12th!
Short
by Novi_Fibonacci
AUD/USD steady despite weak GDPThe Australian dollar is drifting on Wednesday. AUD/USD is trading at 0.6704 in the European session, down 0.10% today at the time of writing. The Australian dollar took a bath a day earlier, sliding 1.1%, one of the sharpest daily declines this year. Australia’s economy gained a paltry 0.2% q/q in the second quarter, shy of the market estimate of 0.3% and unchanged for a third consecutive quarter. This was the softest pace of growth in five quarters and the small gain was driven by higher government spending as household spending declined. Yearly, GDP climbed 1%, in line with the market estimate and down from 1.3% in the first quarter. This was the lowest annual GDP release since the fourth quarter of 2020. Australia’s economic picture is being described by some local commentators as a “horror show”. This is not a wild exaggeration as GDP is in the doldrums, inflation remains sticky and consumer spending was flat in July. The Reserve Bank has maintained rates at 4.35% since November but inflation hasn’t fallen as quickly as anticipated. The GDP release is unlikely to be a factor at the Reserve Bank of Australia’s next meeting on Sept. 24. The central bank is primarily concerned with inflation and the labor market. Governor Bullock has essentially ruled out a rate cut in the next six months but the markets have priced in a rate cut before year’s end and more cuts in early 2025. Bullock will speak at an event in Sydney early on Thursday and the markets will be looking for some insights from the hawkish Governor regarding future rate policy. There is support at 0.6681 and 0.6650 0.6738 and 0.6769 are the next resistance lines
by OANDA
AUD/USD sinks ahead of GDPThe Australian dollar is sharply lower on Tuesday. AUD/USD is trading at 0.6732 in the European session, down 0.88% today at the time of writing. Australia’s economy has been sputtering and the markets aren’t expecting much change from second-quarter GDP on Wednesday. GDP is expected to trickle lower to 1% y/y, down from 1.1% in Q1, which was the weakest pace of growth since Q4 2020. Quarterly, the market estimate for GDP stands at 0.3%, compared to 0.1% in Q1. GDP-per-capita is expected to be negative, another indication that economic activity remains subdued. Australia has been hit by a drop in iron ore and core prices and exports fell by 4.4% in the second quarter, which doesn’t bode well for the Australian dollar. The GDP is unlikely to change the Reserve Bank of Australia’s plans when it meets on Sept. 24. The central bank is closely watching inflation, which remains stubbornly high, as well as the labor market. Governor Bullock has said she has no plans to lower the cash rate from its current 4.35% for the next six months. The RBA has stuck to its “higher for longer” stance and has maintained rates since November. The Federal Reserve is widely expected to lower rates on September 18, with a 70% likelihood of a quarter-point cut and a 31% likelihood of a half-point cut. Ahead of the meeting is a crucial employment report on Friday. The previous jobs report was much weaker than expected and triggered a meltdown in the financial markets. Another weak jobs report would raise the likelihood of a half-point cut, while a solid release will cement a quarter-point cut. AUD/USD has pushed below support at 0.6780 and is testing support at 0.6737. Below, there is support at 0.6708 0.6809 and 0.6852 are the next resistance lines
by OANDA
Australian CPI falls but markets not impressedThe Australian dollar continues to have a quiet week. AUD/USD is trading at 0.6796 in the European session, up 0.06% on the day at the time of writing. Australia’s inflation rate continued to decelerate in July, although the markets were hoping for more. CPI rose 3.5%, down from 3.8% in June but above the market estimate of 3.4%. This was the lowest figure since March but much of the decline was driven by electricity rebates which artificially lowered electricity prices. Core inflation eased but goods inflation remained flat. The markets weren’t impressed with the inflation data and the odds of a rate cut in November fell to 48%, down from 58% prior to the inflation release. The markets are more dovish than the Reserve Bank of Australia, which has discussed raising rates at recent meetings. The central bank is not satisfied with the pace of underlying inflation and has projected that it won’t return to the target band of 2% to 3% until the end of 2025. Governor Bullock has said that the Bank has no plans to cut for at least six months, but the markets are betting that the RBA won’t stay on the sidelines while the Fed and other major central banks are lowering rates. The financial markets are hanging onto every word from FOMC members and we’ll hear from members Christopher Waller later today and Rafael Bostic early on Thursday. As well, the US releases second estimate GDP for the second quarter on Thursday. The initial estimate showed the economy powering ahead with a 2.8% gain, double the 1.4% pace in Q1. The second estimate is expected to confirm the initial reading and confirm that the economy remains in solid shape, despite concerns about a weak employment labor which led to a market meltdown earlier this month. AUD/USD is testing support at 0.6784. Below, there is support at 0.6771 0.6805 and 0.6818 are the next resistance lines
by OANDA
Aussie jumps as RBA says rates could riseThe Australian dollar has had a busy week and is showing strong gains on Thursday. In the European session, AUD/USD is trading at 0.6550, up 0.50% at the time of writing. Two days after the Reserve Bank of Australia held the cash rate, Governor Bullock reinforced her hawkish stance on monetary policy. At the meeting, Bullock dropped a bombshell, saying she didn’t expect a rate cut for at least the next six months. Bullock said earlier today that the central bank wouldn’t hesitate to raise rates if needed, arguing that “the alternative of persistently high inflation is worse”. The RBA discussed the possibility of a rate hike at recent meetings and today Bullock said the RBA board had “explicitly considered” a rate hike at Tuesday’s meeting. The Australian dollar has responded with strong gains to Bullock’s hawkish remarks. At the Tuesday meeting, the central bank opted to maintain rates at the 12-year high of 4.35% for a seventh straight time. At a time when other major central banks have lowered rates and the mighty Federal Reserve is poised to make an initial cut in September, the RBA could well move in the opposite direction. The blame can be squarely put on inflation, which remains sticky, especially services prices. The RBA is projecting that CPI, which rose to 3.9% in the second quarter, won’t recede to 2-3% target until late 2025. The labor market continues to remain tight to the large-scale immigration, which will also make it difficult for the RBA to reduce rates. The financial markets are not marching to Bullock’s hawkish tune and widely expect a rate cut in December. The RBA has a poor track record with its forward guidance, particularly when it pledged in 2020 not to raise rates until 2023 and then hiked in May 2022. As well, the trend among central banks has been to lower rates and the RBA risks becoming an outlier if its raises rates. AUD/USD pushed above resistance at 0.6520 and tested resistance at 0.6559 earlier 0.6471 and 0.6432 are the next support levels
by fisherkj4
AUD/USD remains under pressure as RBA holds ratesThe Australian dollar gained ground earlier but has reversed directions and has edged lower. In the European session, AUD/USD is trading at 0.6778, down 0.24% at the time of writing. The Reserve Bank of Australia held the cash rate at 4.35% for a seventh straight time today. The markets had fully priced in this move and the Australian dollar’s reaction has been muted. At her press conference, RBA Governor Bullock said that policymakers had discussed the possibility of raising rates at today’s meeting. This has become a pattern for the RBA, which considered hiking rates in previous meetings but opted to hold rates each time. Bullock dropped a bombshell when she said that the central bank was unlikely to lower interest rates for at least six months due to inflation being too high. Bullock said that the markets were “a little bit ahead of themselves” in pricing rate cuts, but the markets still expect the Bank to start lowering rates before the end of the year. The RBA is currently forecasting that inflation, which rose to 3.8% in Q2, will not drop to the midpoint of the 1-3% target band until mid-2026. The RBA Governor noted the sudden meltdown in global stock markets, but said this development had not factored in to today’s rate decision. The rout stocks was a reaction to a soft US employment report on Friday, which has raised fears of a US recession. The Australian dollar wobbled on Monday, falling as much as 2.4% before recovering most of these losses. The S&P ASX 200 index, the country’s benchmark stock index, declined by 3.7% on Monday but has stabilized today. There is resistance at 0.6562 and 0.6627 0.6455 and 0.6390 are the next support levels
by OANDA
AUD/USD slides on fears over the US economyThe Australian dollar has taken a nasty spill to start off the trading week. AUD/USD dropped as much has 2.5% in the Asian session and fell to its lowest levels since November 2023. The Aussie has pared those losses and is down 0.96% at the time of writing, trading at 0.6448. The Reserve Bank of Australia meets early Tuesday and it’s a virtual certainty that the Bank will hold the cash rate at 4.35%. The RBA has maintained rates six straight times and policy makers have discussed raising rates at recent meetings. This goes against the grain of the current trend in which central banks are lowering rates. The RBA would prefer to lower rates, which are at a 12-year high and are squeezing businesses and households. The problem remains stubborn inflation, which moved the wrong way in the second quarter, rising from 3.6% to 3.8%. This is well above the RBA’s upper band of its target range of between 1 and 3% and it won’t be a surprise if policy makers again debate raising rates at tomorrow’s meeting before keeping rates on hold. With the RBA expected to stay pat, the markets will be focusing on the rate statement and Governor Bullock’s press conference. The message from the RBA is expected to be along the lines that inflation remains too high and it’s premature to cut interest rates. The Federal Reserve is aiming for a soft landing for the US economy, but concerns are rising that the economy could tip into recession. US nonfarm payrolls for July slowed to 114 thousand on Friday, much lower than the revised 179 thousand in June and the market estimate of 175 thousand. The labour market has cooled much more quickly than expected, and there have been calls for an emergency unscheduled rate cut. The Fed would prefer not to make such a move, which could panic the markets, but the next meeting on September 18th is looking far away. Can the Fed afford to wait until then to deliver a rate cut? AUD/USD pushed through 0.6471 and is testing support at 0.6432 There is resistance at 0.6520 and 0.6559
Long
by OANDA