Australian Dollar Remains On The Defensive As Weaker Data Spurs RBA Rate Cut Speculation -

Australian Dollar Remains On The Defensive As Weaker Data Spurs RBA Rate Cut Speculation

Dec 04, 2024Jeremy ParkinsonFinance, No picture0

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The Australian Dollar softens in Thursday’s Asian session.

Slower-than-expected Australian Q3 GDP and heightened expectations of RBA’s dovish stance exert some selling pressure on the Aussie.

The US weekly Initial Jobless Claims and Goods Trade Balance are due later on Thursday.

The Australian Dollar (AUD) remains under selling pressure on Thursday. The disappointing Australian economic data and rising expectations for an early interest rate cut by the Reserve Bank of Australia (RBA) drag the Aussie lower. Additionally, the concerns about potential tariffs on imports from President-elect Donald Trump might contribute to the AUD’s downside.

Traders will monitor the US weekly Initial Jobless Claims and Goods Trade Balance on Thursday for fresh impetus. Any signs of softer US labour market data could weaken the Greenback and help limit the pair’s losses. On Friday, all eyes will be on the US Nonfarm Payrolls (NFP) report for November.

Australian Dollar retains negative bias amid downbeat data, RBA dovish bets

Australia’s trade surplus increased to 5,953M MoM in October from 4,532M (revised from 4,609M) in September, better than the 4,500M forecasts.

Australia’s Gross Domestic Product (GDP) grew 0.3% QoQ in the third quarter (Q3), compared with the 0.2% growth in Q2. This reading was below the market consensus of 0.4%.

The final reading of Australia’s Judo Bank Services PMI improved to 50.5 in November from 49.6 in October, beating the estimation of 49.6.

The US ISM Services PMI fell to 52.1 in November from 56.0 in October. This reading came in weaker than the expectation of 55.5.

The US S&P Global Composite PMI declined to 54.9 in November versus 55.3 prior. Meanwhile, the Services PMI dropped to 56.1 in November from 57.0 in the previous reading. Both figures came in weaker than the estimations.

The Fed Chair Jerome Powell said on Wednesday that the US economy is stronger now than the US central bank had expected in September when it began reducing interest rates, allowing Fed officials to potentially slow the pace of interest rate cuts ahead.

San Francisco Fed President Mary Daly noted on Wednesday that the US central bank does not need to be urgent on rate cuts, adding that the Fed has more work ahead to achieve 2% inflation and lasting growth.

AUD/USD’s bearish momentum on the daily chart remains intact
The Australian Dollar trades on a softer note on the day. The negative outlook of the AUD/USD pair remains in play, characterized by the price holding below the key 100-day Exponential Moving Average (EMA) on the daily timeframe. The 14-day Relative Strength Index (RSI) stands below the 50-midline near 37.70, supporting the downward movement of the pair in the near term.

Sustained bearish momentum below 0.6325 could draw in more sellers to 0.6285, the low of October 3, 2023. Any follow-through selling could see a drop to the 0.6200 psychological mark.

On the upside, any follow-through buying above the upper boundary of the trend channel of 0.6512 could pave the way to 0.6626, the 100-day EMA. Sustained trading above the mentioned level could pave the way to 0.6687, the high of November 7. More By This Author:Japanese Yen Struggles To Gain Ground Ahead Of Jibun Bank Services PMI Data
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