Created
: 2024.09.21
- English
- English
- What's Myforex
- Share
- Use tools
- Get information
- What's New
- Help center
- About us
- Customer support
- Terms and policies
-
-
PortfolioShare your portfolio and performance in real time -
Events & contestsEvents and contests held by retail brokers around the world
-
-
Real-time spread comparisonCompare spreads of major retail brokers in real time -
Volatility analysisVisualize volatility as a measure of daily market activity -
Swap point comparisonCompare buy and sell swap values for each broker by symbol -
Market rates & chartsCheck prices for all instruments offered by each broker -
IndicatorsProviding in-house developed indicators for MT4/MT5 -
Trading calculatorsCalculation tools for each broker to help you trade
-
-
World FX newsLatest news on forex and cryptocurrencies from around the world -
Broker informationTrading information of retail brokers worldwide -
MetaTrader4/5 user guideUser guide collection for the latest MetaTrader4/5 -
Economic calendarRelease calendar for indicators from official sources of major economies
Australian Dollar declines as USD recovers
Breaking news
Australian Dollar declines as USD recovers
New
2024.09.21 05:18
2024.09.21 05:18
2024.09.21 05:18
- Upbeat Aussie Employment data strengthens case for RBA to maintain its current interest rate policy.
- Aussie shows little reaction to PBoC's decision to leave interest rates unchanged.
- Fed dovish bets might limit the downside.
The AUD/USD declined by 0.40% to 0.6790 in Friday's session, pressured by growing expectations of interest rate cuts by the Federal Reserve (Fed). The Fed's focus on preventing labor market deterioration has led traders to anticipate a 75-basis-point (bps) decrease in the remaining two Fed policy meetings. The Australian Dollar remained stable despite the People's Bank of China's (PBoC) decision to maintain interest rates unchanged.
Despite the mixed Australian economic outlook, the Reserve Bank of Australia's (RBA) hawkish stance on inflation has led to market expectations of a modest 25-basis-point rate cut in 2024. This signals a shift away from the previously anticipated more aggressive easing cycle due to the persistent inflationary pressures.
Daily digest market movers: Australian Dollar declines, Fed rate cut expectations limit downside
- Fed cut interest rates by 50 bps, signaling further cuts due to labor market concerns.
- Traders anticipate 75 bps of rate cuts in November and December, with a 43% probability of a 50 bps cut in November.
- Australian Dollar remains firm on strong employment data, dampening expectations for RBA rate cuts.
- Australia's August employment report showed a gain of 47.5K jobs, exceeding estimates and supporting the currency.
- China's PBoC left interest rates unchanged with no significant impact on AUD/USD.
AUD/USD technical outlook: Indicators turn flat but outlook remains positive
Around the 0.6800 mark, the AUD/USD indicators turned flat as buyers seem to be locking in gains from the previous session's upwards movements. With the pair near yearly highs, it may be set to trade sideways in the next several sessions before the next upward leg. In the meantime, indicators turned flat but remain deep in positive terrain with the Relative Strength Index (RSI) near 62.
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.
Last updated
: 2024.09.21
Related articles
NZD/USD Price Analysis: Neutral outlook as bulls and bear fight for the lead
2024.09.21 07:07NZD/JPY Price Analysis: Bullish momentum remains, indicators gather strength
2024.09.21 06:38USD/JPY Price Forecast: Records back-to-back days of gains, stays below 144.00
2024.09.21 05:39Australian Dollar declines as USD recovers
2024.09.21 05:17Canadian Dollar flattens on tepid Friday
2024.09.21 04:37US Dollar rises as sellers take a breather, political jitters
2024.09.21 03:19
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
Was this article helpful?
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Thank you for your feedback.
Thank you for your feedback.
Most viewed
NZD/USD Price Analysis: Neutral outlook as bulls and bear fight for the lead
The NZD/USD traded mostly flat on Friday's session and failed to hold gain which took it to a high around 0.6260 as it then retreated to 0.6240.
New
2024.09.21 07:07NZD/JPY Price Analysis: Bullish momentum remains, indicators gather strength
In Friday's session, the NZD/JPY continued its climb, propelled by a 0.90% rise to 89.80.
New
2024.09.21 06:38USD/JPY Price Forecast: Records back-to-back days of gains, stays below 144.00
The USD/JPY registers gain for back-to-back days, yet it remains shy of decisively cracking the 144.00 figure despite registering a weekly high of 144.49.
New
2024.09.21 05:39Australian Dollar declines as USD recovers
The AUD/USD declined by 0.40% to 0.6790 in Friday's session, pressured by growing expectations of interest rate cuts by the Federal Reserve (Fed).
New
2024.09.21 05:17Gold skyrockets to record-high above $2,600 on Fed rate cut speculation
Gold prices climbed past $2,600, recording new all-time highs amid increasing speculation that the Federal Reserve will continue to lower borrowing costs and heightened tensions between Israel and Hezbollah in the Middle East.
New
2024.09.21 05:07Canadian Dollar flattens on tepid Friday
The Canadian Dollar (CAD) found little underpinning momentum on Friday, and the CAD is poised to wrap up the end of the trading week close to where it started.
New
2024.09.21 04:37US Dollar rises as sellers take a breather, political jitters
The US economy is experiencing a moderate slowdown, but indicators suggest that economic activity remains robust overall.
New
2024.09.21 03:19Dow Jones Industrial Average squeezes higher on Friday
The Dow Jones Industrial Average (DJIA) edged back into the top end during the Friday market session, keeping bids north of 42,000 and sticking close to this week's all-time record peaks.
New
2024.09.21 03:18Mexican Peso extends losing streak amid risk aversion
The Mexican Peso extended its losing streak against the Greenback to three consecutive days, with the currency set to sustain weekly losses.
New
2024.09.21 02:57Fed's Bowman: Would have liked a smaller first cut
Federal Reserve (Fed) Board of Governors member Michelle Bowman clarified on Friday why the policymaker voted against the Fed's 50 bps jumbo rate cut this week.
New
2024.09.21 02:34Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy
