- The AUD/USD pair remains stable following the remarks from the RBA’s Assistant Governor (Economics), Sarah Hunter.
- RBA’s Sarah Hunter noted that elevated rates are suppressing demand, which is expected to lead to a mild economic downturn.
- Donald Trump argued that the fees he intends to impose on imports would not lead to higher prices in the US.
The AUD/USD pair holds its position on Wednesday, following remarks from the Reserve Bank of Australia’s (RBA) Assistant Governor for Economics, Sarah Hunter. However, the Australian Dollar’s (AUD) losses may be appreciated as RBA Governor Michele Bullock maintained a hawkish outlook last week, emphasizing that it is too soon to consider rate cuts with elevated inflation.
RBA’s Assistant Governor Sarah Hunter noted that high interest rates are dampening demand, contributing to what is expected to be a mild economic downturn. Hunter also highlighted that the labor market remains tight compared to full employment levels, with employment growth likely to continue but at a slower pace than population growth, per Reuters.
Read more: RBA’s Hunter: Easing in labour market similar to past mild downturns
The AUD/USD pair encountered pressure as the US Dollar gained strength following a recent US labor market report, which cast doubt on the possibility of an aggressive interest rate cut by the Federal Reserve (Fed) at its upcoming September meeting.
During the US Presidential Debate, Donald Trump argued that the fees he plans to impose on imports will not result in higher prices for Americans. He stated, “Who’s going to have higher prices in China and all of the countries that have been ripping us off for years.”
Daily Digest Market Movers: Australian Dollar consolidates amid rising risk-off mood
- According to the CME FedWatch Tool, markets are fully anticipating at least a 25 basis point (bps) rate cut by the Federal Reserve at its September meeting. The likelihood of a 50 bps rate cut has slightly decreased to 31.0%, down from 38.0% a week ago.
- Morgan Stanley’s Chief China Economist, Robin Xing, stated that China is undoubtedly experiencing deflation, likely in the second stage of the process. Xing noted that Japan’s experience suggests that the longer deflation persists, the greater the need for China to implement significant stimulus measures to overcome the debt-deflation challenge, per Business Standard.
- Australia’s Westpac Consumer Confidence fell by 0.5% month-on-month in September, swinging from a 2.8% gain in August.
- China’s Trade Balance reported a trade surplus of CNY 649.34 billion for August, increasing from the previous reading of CNY 601.90 billion. Meanwhile, China’s Exports (CNY) increased by 8.4% year-on-year, following the previous rise of 6.5%.
- RBC Capital Markets now expects the Reserve Bank of Australia to implement a rate cut at its February 2025 meeting, earlier than its previous forecast of May 2025. Despite inflation in Australia remaining elevated above the RBA’s target, slower economic growth is not considered a sufficient reason for a rate cut this year.
- The US Bureau of Labor Statistics (BLS) reported that Nonfarm Payrolls (NFP) added 142,000 jobs in August, below the forecast of 160,000 but an improvement from July’s downwardly revised figure of 89,000. Meanwhile, the Unemployment Rate fell to 4.2%, as expected, down from 4.3% in the previous month.
- Federal Reserve (Fed) Bank of Chicago President Austan Goolsbee remarked on Friday that Fed officials are starting to align with the broader market’s sentiment that a policy rate adjustment by the US central bank is imminent, according to CNBC. FXStreet’s FedTracker, which uses a custom AI model to evaluate Fed officials’ speeches on a dovish-to-hawkish scale from 0 to 10, rated Goolsbee’s comments as dovish, assigning them a score of 3.2.
Technical Analysis: Australian Dollar hovers around 0.6650, followed by the lower boundary of descending channel
The AUD/USD pair trades near 0.6650 on Wednesday, with technical analysis of the daily chart indicating that the pair remains within a descending channel, signaling a bearish bias. The 14-day Relative Strength Index (RSI) is also below the 50 level, further confirming the ongoing bearish trend.
On the downside, the AUD/USD pair may target the lower boundary of the descending channel around 0.6620. A break below this level could reinforce the bearish outlook, potentially pushing the pair toward the throwback support zone around 0.6575.
On the upside, the AUD/USD pair may encounter resistance around the nine-day Exponential Moving Average (EMA) at 0.6693, followed by the upper boundary of the descending channel near 0.6740. A break above this upper boundary could reduce the bearish bias, potentially paving the way for the pair to retest its seven-month high of 0.6798, last reached on July 11.
AUD/USD: Daily Chart
Australian Dollar PRICE Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.15% | -0.08% | -0.37% | -0.06% | -0.08% | 0.02% | -0.22% | |
| EUR | 0.15% | 0.08% | -0.20% | 0.11% | 0.13% | 0.17% | -0.06% | |
| GBP | 0.08% | -0.08% | -0.30% | 0.02% | -0.00% | 0.09% | -0.14% | |
| JPY | 0.37% | 0.20% | 0.30% | 0.34% | 0.30% | 0.38% | 0.16% | |
| CAD | 0.06% | -0.11% | -0.02% | -0.34% | -0.03% | 0.07% | -0.17% | |
| AUD | 0.08% | -0.13% | 0.00% | -0.30% | 0.03% | 0.03% | -0.13% | |
| NZD | -0.02% | -0.17% | -0.09% | -0.38% | -0.07% | -0.03% | -0.23% | |
| CHF | 0.22% | 0.06% | 0.14% | -0.16% | 0.17% | 0.13% | 0.23% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
Australian Dollar FAQs
One of the most significant factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country another key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
The Reserve Bank of Australia (RBA) influences the Australian Dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole. The main goal of the RBA is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
Source: https://www.fxstreet.com/news/australian-dollar-moves-little-following-rba-hunters-remarks-us-presidential-debate-202409110148