Select Language

Australian Dollar declines after US data and Aussie Retail Sales

Breaking news

Australian Dollar declines after US data and Aussie Retail Sales

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2024.11.01 05:26
Australian Dollar declines after US data and Aussie Retail Sales

update 2024.11.01 05:26

  • US PCE Prices Index remained steady in September, as well as the core measure.
  • US jobless claims fell to 216K in the week of October 25.
  • Retail Sales in Australia grew in September slightly below expectations.

The AUD/USD declined by 0.45% to 0.6545 in Thursday's session, remaining near an 11-week low of 0.6540 ahead of the US Nonfarm Payrrolls data on Friday. This decline comes after the recent surge in US inflation and mid-tier economic data.

Additionally, Retail Sales in Australia grew marginally in September, falling below expectation, which seems to be weighing on the Aussie Dollar.

Daily digest market movers: Australian Dollar declines amid weakening weakening economy and steady USD

  • On the Aussie front, Retail Sales somewhat tanking in September is making investors dump the AUD as it may prompt a more dovish stance from the Reserve Bank of Australia.
  • On the other hand, Market expectations for the upcoming Federal Open Market Committee (FOMC) meeting next week currently suggest a 25 -basis-point rate cut, influenced by recent economic indicators.
  • A key focus for investors will be October's NFP data, with forecasts indicating 113K new jobs were added, a notable drop from September's 254K.
  • The latest US jobless claims report showed a decline to 216K for the week of October 25, contradicting predictions of a rise to 230K, which underscores ongoing labor market resilience.
  • The core PCE Price Index, closely monitored by the Federal Reserve, held steady at 2.7% in September, despite projections of a decrease to 2.6%.
  • Additionally, the broader PCE Price Index grew at 2.1% annually in September, down slightly from August's 2.2% and below the anticipated 2.2% rate.

AUD/USD technical outlook: Pair remains bearish, indicators oversold

The daily Relative Strength Index (RSI) is currently at 30, which is in the oversold area. The RSI's slope is declining sharply, suggesting that selling pressure is rising. The Moving Average Convergence Divergence (MACD) is flat and in the red, indicating that selling pressure is flat. Both suggest that the selling pressure might have become over-extended and that a consolidation is coming.

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.


Date

Created

 : 2024.11.01

Update

Last updated

 : 2024.11.01

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

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

PBOC sets USD/CNY reference rate at 7.1135 vs. 7.1250 previous

The People's Bank of China (PBoC) set the USD/CNY central rate for the trading session ahead on Friday at 7.1135, as compared to the previous day's fix of 7.1250 and 7.1122 Reuters estimates.
New
update2024.11.01 10:18

USD/JPY weakens below 152.00, US NFP data in focus

The USD/JPY pair softens to around 151.95 during the Asian trading hours on Friday.
New
update2024.11.01 10:13

GBP/USD holds below 1.2900 ahead of US NFP data

The GBP/USD pair remains on the defensive around 1.2895, the lowest since August 16 during the early Asian trading hours on Friday.
New
update2024.11.01 09:18

EUR/USD extends upside above 1.0850, with all eyes on US NFP data

The EUR/USD pair extends the rally to 1.0885 during the early Asian session on Friday.
New
update2024.11.01 08:13

Gold price retreats from record highs after mixed US data

Gold price retreated from all-time high on Thursday as traders failed to capitalize on falling US Treasury bond yields.
New
update2024.11.01 07:31

Australian Dollar declines after US data and Aussie Retail Sales

The AUD/USD declined by 0.45% to 0.6545 in Thursday's session, remaining near an 11-week low of 0.6540 ahead of the US Nonfarm Payrrolls data on Friday.
New
update2024.11.01 05:25

Mexican Peso gains on past data, weak US Dollar

The Mexican Peso appreciated over 0.60% against the US Dollar on Thursday after posting losses for the fourth straight day.
New
update2024.11.01 04:58

Forex Today: The continuation of the Dollar rally now looks at US NFP

The US Dollar lost additional momentum on Thursday, primarily as the Japanese yen gained strong support following a slightly hawkish tone from the BoJ meeting, preventing the dollar from recovering any upward traction.
New
update2024.11.01 04:08

US Dollar struggles as buyers digest inflation and labor market data

The US Dollar Index (DXY) trades softer on Thursday despite persistent inflation in the United States, as measured by the Personal Consumption Expenditure (PCE) Prices Index.
New
update2024.11.01 03:22

Dow Jones Industrial Average sinks over 200 points on risk aversion

The Dow Jones Industrial Average (DJIA) plummeted over 200 points or more than half a percentage point during the North American session on Thursday.
New
update2024.11.01 02:47

Disclaimer:arw

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.

  • Facebook
  • Twitter
  • LINE

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

I agree
share
Share
Cancel