The Australian Dollar (AUD) continued its decline on Tuesday, starting from January 11. The AUD/USD pair faced downward pressure after January’s Westpac Consumer Confidence data showed a contraction, potentially influencing expectations of policy tightening by the Reserve Bank of Australia (RBA) at its February meeting.

Australia’s Consumer Confidence, measured by the Melbourne Institute, fell by 1.3%, in contrast to the previous increase of 2.7%. However, TD Securities' Inflation data on Monday showed a rise in December, which might limit the Aussie Dollar's decline.

The DXY saw a gap-up at the start of Tuesday’s session, driven by optimistic U.S. Treasury yields. Investor confidence in the U.S. Dollar (USD) increased after hawkish remarks from Atlanta Federal Reserve President Raphael Bostic, who warned that cutting rates too soon could affect inflation.

The U.S. Dollar strengthened due to geopolitical tensions between Israel and Gaza, disrupting trade in the Red Sea. Iranian-backed Houthis continued to attack vessels despite U.S. and U.K. military strikes in Yemen.

U.S. Empire State Manufacturing Index for January, a speech by Federal Reserve's Waller, along with China’s GDP and Retail Sales data on Wednesday, will be key focuses for traders.

Daily Market Update: Australian Dollar Weakens as U.S. Dollar Strengthens

  1. TD Securities Inflation in Australia rose to 5.2% YoY in December from 4.4% in November.
  2. Australian job ads saw a 0.1% increase in December, following a 4.6% decline.
  3. The People's Bank of China (PBoC) maintained its medium-term lending facility rate at 2.5%, raising expectations of a Reserve Requirement Ratio (RRR) cut next month.
  4. China's Consumer Price Index (YoY) fell by 0.3% in December, slightly better than the forecasted 0.4% drop. Monthly CPI declined 0.1%, contrary to market expectations of a 0.2% rise. The Producer Price Index dropped by 2.7% YoY, slightly above the expected 2.6%.
  5. Barclays revised its forecast for the Federal Reserve's first rate cut to March from June.
  6. The U.S. Bureau of Labor Statistics reported a 1.0% YoY rise in December’s PPI, with Core PPI falling to 1.8% YoY. Both indices remained flat on a monthly basis.
  7. The U.S. Bureau of Labor Statistics reported a jump in CPI to 3.4% YoY in December, exceeding November's figure and market expectations. Monthly CPI growth was 0.3%, while Core CPI dropped to 3.9% YoY. Monthly figures held at 0.3%.


Disclaimer!

The analysis "Australian Dollar in Negative Trend! US-China Data War in Focus" is based on fundamental and technical perspectives from trusted sources. It is not financial advice or a trading invitation. Always do independent research before relying on forex information for your trades.

Stay updated with the latest news and articles from GIC Indonesia by checking Google News daily to follow updates on forex and crypto markets. Also, trade on GICTrade using an ECN account to enjoy trading with spreads as low as zero!