Created
: 2024.10.21
2024.10.21 10:51
The Australian Dollar (AUD) extended its winning streak against the US Dollar (USD) for the third consecutive session on Monday. The upside of the Aussie Dollar could be attributed to the rate cuts in China, its largest trading partner.
The People's Bank of China (PBoC) reduced the 1-year Loan Prime Rate (LPR) to 3.10% from 3.35% and the 5-year LPR to 3.6% from 3.85%, in line with expectations. Lower interest rates are anticipated to stimulate China's domestic economic activity, potentially increasing demand for Australian exports.
Australia's upbeat employment data, released last week, has reduced the likelihood of the Reserve Bank of Australia (RBA) implementing an interest rate cut this year. This outlook has bolstered the AUD, providing continued support to the AUD/USD pair.
RBA Deputy Governor Andrew Hauser addressed the CBA 2024 Global Markets Conference in Sydney on Monday, expressing slight surprise at the strength of employment growth. Hauser noted that the labor participation rate is remarkably high and emphasized that while the RBA is data-dependent, it is not data-obsessed.
The AUD/USD pair trades around 0.6720 on Monday. A technical analysis of the daily chart indicates that the pair is positioned below the nine-day Exponential Moving Average (EMA), suggesting a short-term bearish bias. Additionally, the 14-day Relative Strength Index (RSI) remains below 50, confirming the prevailing bearish sentiment.
In terms of support, the immediate level to watch is the psychological barrier at 0.6700. A break below this level could exert downward pressure on the AUD/USD pair, pushing it toward the eight-week low of 0.6622, last seen on September 11.
On the upside, the AUD/USD pair may test the nine-day EMA at 0.6723, followed by the 50-day EMA at 0.6740. A break above the latter could support the pair to test the psychological level of 0.6800.
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the Canadian Dollar.
USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
---|---|---|---|---|---|---|---|---|
USD | 0.00% | 0.03% | -0.21% | -0.06% | -0.21% | -0.18% | 0.08% | |
EUR | -0.01% | -0.05% | -0.31% | -0.01% | -0.25% | -0.29% | -0.01% | |
GBP | -0.03% | 0.05% | -0.27% | -0.08% | -0.24% | -0.20% | 0.00% | |
JPY | 0.21% | 0.31% | 0.27% | 0.15% | 0.00% | 0.09% | 0.24% | |
CAD | 0.06% | 0.00% | 0.08% | -0.15% | -0.25% | -0.06% | 0.00% | |
AUD | 0.21% | 0.25% | 0.24% | -0.01% | 0.25% | 0.12% | 0.22% | |
NZD | 0.18% | 0.29% | 0.20% | -0.09% | 0.06% | -0.12% | 0.21% | |
CHF | -0.08% | 0.00% | -0.01% | -0.24% | -0.01% | -0.22% | -0.21% |
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).
The People's Bank of China's (PBoC) Monetary Policy Committee (MPC) holds scheduled meetings on a quarterly basis. However, China's benchmark interest rate - the loan prime rate (LPR), a pricing reference for bank lending - is fixed every month. If the PBoC forecasts high inflation (hawkish) it raises interest rates, which is bullish for the Renminbi (CNY). Likewise, if the PBoC sees inflation in the Chinese economy falling (dovish) and cuts or keeps interest rates unchanged, it is bearish for CNY. Still, China's currency doesn't have a floating exchange rate determined by markets and its value against the US Dollar is fixed mainly by the PBoC on a daily basis.
Read more.Last release: Mon Oct 21, 2024 01:00
Frequency: Irregular
Actual: 3.1%
Consensus: 3.15%
Previous: 3.35%
Source: The People's Bank of China
Created
: 2024.10.21
Last updated
: 2024.10.21
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