Australian Dollar adds gains on RBA’s hawkish stance

• AUD/USD gains on soft US data and RBA’s hawkish outlook.
• RBA Bullock reiterates hawkish stance, signaling no near-term rate cuts.
• Monetary policy diveargence favors the Aussie as US data softens and RBA remains hawkish.

The AUD/USD pair traded in a tight range on Thursday but tallied daily gains after the USD was seen weak after mixed US data.

The Australian economy’s uncertain prospects and the Reserve Bank of Australia’s (RBA) aggressive stance on interest rates have led to a shift in market expectations. However, the bank hasn’t yet embraced cuts in the near term.

Daily digest market movers: Australian Dollar gains slightly after trade figures and hawkish RBA

• Australian exports rose 0.7% MoM and 1.4% YoY in July, while imports fell by 0.8% MoM and 3.0% YoY.
• Exports to China slumped significantly in July, with coal and iron ore prices continuing to decline.
• On Thursday, RBA Governor Bullock maintained a hawkish stance, reiterating that the Board does not expect to cut rates in the near term.
• Across the Pacific, US labor market data disappointed, while ISM Services PMI figures helped the USD recover some losses.
• Monetary policy divergence continues to favor the Aussie, with RBA cash rate futures pricing in a high probability of a 25 bps cut by December.

AUD/USD technical outlook: Indicators flash mixed signals, overall outlook remains positive

On the daily chart, the Relative Strength Index (RSI) points up while the Moving Average Convergence Divergence (MACD) prints a red bar, and both flash mixed signals. However, with the pair above the Simple Moving Average (SMA), the overall outlook is positive, with the pair set to retest the zone above 0.6780.