Australian Dollar Edges Lower Following RBA Minutes, PBoC Rate Decision -

Australian Dollar Edges Lower Following RBA Minutes, PBoC Rate Decision

Aug 19, 2024Jeremy ParkinsonFinance, No picture0

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The Australian Dollar declines despite a hawkish sentiment surrounding the RBA.

The PBoC maintained its current interest rate at 3.35% at August’s meeting held on Tuesday.

Fed President Neel Kashkari indicated that discussing potential US rate cuts in September is warranted.

The Australian Dollar (AUD) halts its winning streak against the US Dollar (USD) on Tuesday. However, the AUD/USD pair may appreciate following the release of the Reserve Bank of Australia’s (RBA) August meeting minutes, which suggest that the cash rate could remain steady for an extended period.The Reserve Bank of Australia considered raising rates but concluded that maintaining a steady rate better balanced the risks. RBA members agreed that a rate cut is unlikely in the short term.The People’s Bank of China (PBoC) kept its one-year and five-year Loan Prime Rates (LPRs) unchanged at 3.35% and 3.85%, respectively, in August’s meeting on Tuesday. Any change in the Chinese economy may impact Australian markets as both are close trade partners.The US Dollar (USD) continues to face downward pressure following comments from Federal Reserve (Fed) officials, which have increased the likelihood of upcoming rate cuts by the US central bank. All eyes are now on Fed Chair Jerome Powell’s upcoming speech at Jackson Hole on Friday.

Daily Digest Market Movers: Australian Dollar maintains its position due to a hawkish RBA

Minneapolis Fed President Neel Kashkari stated on Monday that it would be appropriate to discuss potential US interest rate cuts in September due to concerns about a weakening labor market, per Reuters.

Federal Reserve Bank of San Francisco President Mary Daly emphasized Sunday that the US central bank should take a gradual approach to reducing borrowing costs, according to the Financial Times. Additionally, Federal Reserve Bank of Chicago President Austan Goolsbee warned that central bank officials should be cautious about keeping a restrictive policy in place longer than necessary, per CNBC.

On Friday, US Housing Starts dropped by 6.8% in July to 1.238 million units, following a 1.1% increase in June. Meanwhile, the University of Michigan’s Consumer Sentiment Index rose to 67.8 in August, showing its first increase in five months, surpassing expectations and up from 66.4 in July.

On Thursday, US Retail Sales rose by 1.0% month-over-month in July, a significant rebound from June’s 0.2% decline, according to the US Census Bureau. This figure exceeded the forecasted increase of 0.3%. Additionally, Initial Jobless Claims for the week ending August 9 came in at 227,000, better than the anticipated 235,000 and a decrease from the previous week’s 234,000.

US headline Consumer Price Index (CPI) rose 2.9% year-over-year in July, slightly down from the 3% increase in June and below market expectations. The Core CPI, which excludes food and energy, climbed 3.2% year-over-year, a slight decrease from the 3.3% rise in June but aligned with market forecasts.

Technical Analysis: Australian Dollar hovers 0.6750
The Australian Dollar trades around 0.6730 on Tuesday. According to daily chart analysis, the AUD/USD pair is trending upwards within an ascending channel, indicating a bullish bias. Furthermore, the 14-day Relative Strength Index (RSI) is appreciating toward the 70 mark, reinforcing the ongoing bullish momentum.On the upside, the AUD/USD pair could aim for the area near the upper boundary of the ascending channel at the 0.6760 level. A breakout above the ascending channel could push the pair toward its seven-month high of 0.6798, which was reached on July 11.For support, the nine-day Exponential Moving Average (EMA) at 0.6648 appears as a key support level around the lower boundary of the ascending channel. A drop below this level could see the pair test the throwback level at 0.6575. If the pair falls below this support zone, it could indicate a bearish bias, potentially leading it toward the throwback level at 0.6470.

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 Japanese Yen. More By This Author:AUD/JPY Rises To Near 99.00 Following Hawkish Remarks From RBA Governor Bullock Japanese Yen Appreciates As Economic Growth Raises Odds Of Another Rate Hike By The BoJAustralian Dollar Edges Higher Following Moderate Jobs Figures