Today, the AUD dollar received support for an increase following China's interest rate decision. The People's Bank of China (PBoC) maintained the loan prime rate (LPR) at the expected level of 3.45%. However, the AUD/USD pair faces challenges as the US Dollar (USD) tries to recover from a two-month low reached on Friday.

The Reserve Bank of Australia (RBA) is expected to raise interest rates again in the first half of 2024. Marion Kohler, Assistant Governor of the RBA, stated that inflation is expected to decrease but will not reach the RBA's target of 2%-3% until the end of 2025. Investors will likely focus on the RBA Meeting Minutes and Governor Bullock's speech on Tuesday.

The Australian Dollar (AUD) may gain additional support as the United States reports low inflation figures and weak economic activity, contributing to the decline of the Greenback.

Signs of inflationary pressure and weakness in the US labor market have led markets to believe that the Federal Reserve (Fed) may have completed its cycle of interest rate hikes, resulting in the USD weakening compared to the previous week.

The US Dollar Index (DXY) continues to weaken for the second consecutive session due to pressure on US Treasury yields. The 2-year Treasury yield has dropped to 4.88%, a decrease of 0.10% at the time this news was written. The USD faces pressure despite the positive trends shown in US housing data released on Friday.

Building Permits (MoM) rose to 1.487 million, exceeding the market consensus of 1.450 million in October. Meanwhile, Housing Starts (MoM) also increased to 1.372 million compared to the previous figure of 1.346 million.

Boston Federal Reserve President Susan Collins expressed optimism on Friday that the Fed can reduce the inflation rate without causing significant damage to the labor market, remaining "patient" regarding any further interest rate changes.

The Federal Open Market Committee (FOMC) minutes scheduled for release on Tuesday are expected to provide insights into the Fed's stance on inflationary pressures and its approach to monetary policy.

Daily Market Movers Summary: The Australian Dollar Rises After China’s Interest Rate Decision

  1. Australia's seasonally adjusted Employment figures showed a growth of 55,000 in October, surpassing market expectations of 20,000 and the previous figure of 6,700.
  2. The Australian Unemployment Rate remained in line with forecasts at 3.7% in October, although it rose from the previous figure of 3.6%.
  3. The growth of Australia’s Wage Price Index was 1.3%, matching predictions and beating the previous reading of 0.8%. Year-over-year data showed an increase of 4.0%, exceeding the forecast of 3.9%.
  4. US Continuing Claims reached their highest level since 2022, reaching 1.865 million in the week ending November 3, up from 1.833 million in the previous reading.
  5. Initial Claims in the week ending November 10 rose to 231,000, exceeding expectations of 220,000, marking the highest level in nearly three months.
  6. The US Consumer Price Index (CPI) for October showed lower-than-expected figures, with the annual rate slowing from 3.7% to 3.2%, below the consensus of 3.3%. Monthly CPI stagnated at 0.0%, down from 0.4%.
  7. Core CPI rose by 0.2%, below expectations of 0.3%, and the annual rate decreased to 4.0% from the previous 4.1%.


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