AUD Exchange Rate Today - The Australian Dollar (AUD) is around 0.6600 on Monday, influenced by market uncertainty regarding actions against Iran-backed Houthi terrorists in Yemen. The AUD/USD pair has increased due to the weakening of the US Dollar, particularly from the decline in long-term US Treasury yields.

The AUD faces setbacks due to speculation about potential interest rate cuts by the Reserve Bank of Australia (RBA) amid weak Consumer Confidence and Employment Change data. However, a surge in domestic stock markets may provide support, similar to the rally in the US driven by hopes of interest rate cuts by the Federal Reserve (Fed). Additionally, optimism surrounding projected earnings growth of over 20% in 2024 from Taiwan Semiconductor Manufacturing, the world's largest chip producer, also contributes to positive global sentiment.

The People's Bank of China (PBOC) has decided to keep the Loan Prime Rate (LPR) stable at 3.45% for one year and 4.20% for five years.

The US Dollar Index (DXY) continues to decline but may receive support from concerns about maritime trade disruptions in the Red Sea. The US and the UK are attempting to ramp up their campaign without creating wider conflict with Iran. Many vessels are avoiding the Suez Canal and the Red Sea, which could increase risks and insurance costs. Alternative routes around the southern tip of Africa may extend delivery times, costs, and inflation, triggering risk-averse tendencies that drive traders to seek refuge in the US Dollar, putting pressure on the AUD/USD pair.

San Francisco Fed President Mary Daly believes significant work remains to bring inflation back to the 2.0% target. She emphasized that rate cuts should not be considered immediately. Meanwhile, Atlanta Fed President Raphael Bostic reiterated his position regarding expectations for rate cuts ahead of the "blackout" period before the next rate meeting on January 31. Bostic expressed openness to adjusting his view on the timing of rate cuts, stressing that the Fed remains data-dependent.

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Daily Market Movement Summary: Strengthening Australian Dollar Amid Weakening US Dollar

  1. Australian Consumer Inflation Expectations remain stable at 4.5% in January.
  2. The seasonally adjusted Australian unemployment rate remains strong at 3.9%, in line with expectations for December.
  3. A decrease of 65,100 in Australian Employment Change contrasts with an expected increase of 17,600.
  4. The preliminary US Michigan Consumer Sentiment Index rose to 78.8 in January from 69.7, exceeding the forecast of 70.
  5. Existing Home Sales (Monthly) in the US fell by 1.0% in December, reversing a previous increase of 0.8%.
  6. New Housing (Monthly) in the US exceeded expectations in December, reaching 1.46 million compared to the forecast of 1.426 million.
  7. US Building Permits for the month rose to 1.495 million, surpassing the market consensus of 1.48 million.
  8. Initial US Unemployment Claims for the week ending January 12 fell to 187,000 from a previous reading of 203,000.


Disclaimer!

The analysis "AUD Exchange Rate Today: Australian Dollar Strengthens Amid USD Storm!" is based on fundamental and technical perspectives from reliable sources and is not intended as advice or solicitation. Always remember that this content aims to enrich the reader's information. Always conduct your own research regarding other forex information as a reference for your trading.

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