Select Language

AUD/USD oscillates below 0.6600 with US Inflation, Aussie Employment in focus

Breaking news

AUD/USD oscillates below 0.6600 with US Inflation, Aussie Employment in focus

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2024.11.11 20:20
AUD/USD oscillates below 0.6600 with US Inflation, Aussie Employment in focus

update 2024.11.11 20:20

  • AUD/USD trades sideways below 0.6600 with a focus on US/Aussie data.
  • Trump's victory keeps the US Dollar on the frontfoot.
  • The Australian jobless rate is expected to remain steady at 4.1%.

The AUD/USD pair trades in a tight range slightly below the key resistance of 0.6600 in Monday's European session. The Aussie pair consolidates as investors await the United States (US) Consumer Price Index (CPI) and the Australian Employment data for October, which will be released on Wednesday and Thursday.

Market sentiment appears to be asset-specific as risk-perceived currencies are facing pressure, while US equities gain sharply. S&P 500 futures have posted significant gains in the European session. The US Dollar Index (DXY), which gauges the Greenback's value against six major currencies, revisits a more than four-month high of 105.45.

Economists expect the annual headline inflation data to have accelerated to 2.6% from 2.4% in October, with core CPI rising steadily by 3.3%.

The Greenback remains broadly firm on Republican Donald Trump's victory in the US presidential elections who is expected to raise import tariffs universally by 10%, a scenario that will boost inflationary pressures and fiscal deficit, which will force the Federal Reserve (Fed) to return to hawkish interest rate stance.

Meanwhile, the Australian employment report is expected to show that the economy added 25K workers in October, lower than 64.1K in September. The Unemployment Rate is expected to remain steady at 4.1%. The employment data will influence market expectations for the Reserve Bank of Australia (RBA) monetary policy action in the December meeting. Last week, the RBA left its key Official Cash Rate (OCR) unchanged at 4.35% but maintained a hawkish guidance on interest rates.

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

 : 2024.11.11

Update

Last updated

 : 2024.11.11

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

USD/CAD turns upside down on steady Canadian Retail Sales growth, US Dollar retraces

The USD/CAD pair surrenders its entire intraday gains and ticks down as the Canadian Retail Sales data grew steadily in September and the US Dollar (USD) gives up a majority of its intraday gains after refreshing a two-year high.
New
update2024.11.22 22:55

GBP/USD: GBP has stabilized just above 1.25 - Scotiabank

UK data reports today were roundly disappointing, weighing on the Pound Sterling (GBP).
New
update2024.11.22 21:47

EUR/JPY Price Prediction: November bear trend unfolds

EUR/JPY staircases down from its Halloween peak as it unfolds in a short-term downtrend during November.
New
update2024.11.22 21:43

EUR/USD: EUR slumps on weak PMI data - Scotibank

The Euro (EUR) plunged in response to poor macro data reports earlier.
New
update2024.11.22 21:42

USD/CAD: CAD softer but outperforms most peers - Scotiabank

USD/CAD got caught in the crossfire of the hefty US Dollar (USD) advance against the European currencies earlier, rising quickly from the mid/upper 1.39s to an intraday high near 1.4020.
New
update2024.11.22 21:39

USD surges on weak European data - Scotiabank

The US Dollar (USD) is ending the week on a strong note. The DXY raced to a new, two-year high overnight in response to weak European data but has conceded a lot of those gains ahead of North American trading, Scotiabank's Chief FX Strategist Shaun Osborne notes.
New
update2024.11.22 21:34

Crude Oil tries to claim $70 as geopolitics supports price

Crude Oil price steadies on Friday and tries to claim the $70 level after surging over 4.5% so far this week, fueled by fresh escalation between Russia and Ukraine. Both countries are rushing to get the tactical upper hand ahead of possible resolution
New
update2024.11.22 21:14

The recovery rally in the Gold market is likely to take a breather - Commerzbank

The Gold price has also recovered more than half of its losses since the end of October and is once again trading at $2,700 per troy ounce, Commerzbank's commodity analyst Barbara Lambrecht notes.
New
update2024.11.22 21:07

Swiss Gold exports reflect weak demand for Gold in Asia - Commerzbank

The Swiss Federal Customs Authority published data on Gold exports in October this week, Commerzbank's commodity analyst Carsten Fritsch notes.
New
update2024.11.22 20:59

Concerns about supply disruptions cause oil prices to rise - Commerzbank

Oil prices have risen noticeably over the past few days. Brent climbed to $74.8 per barrel in the morning, gaining almost 5% since the beginning of the week, Commerzbank's commodity analyst Carsten Fritsch notes.
New
update2024.11.22 20:56

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