Australian Dollar Today: AUD Breaks Through 3-Month High

Today, the Australian Dollar finds it challenging to continue its gains for a third consecutive session. The AUD/USD pair has dropped below the three-month high of 0.6590, supported by negative sentiment around the US Dollar (USD) and mixed yet strong Global S&P PMI data, while remaining buoyed by stimulus measures in the Chinese property market.

The AUD strengthened due to stimulus in the Chinese property sector and financial support from the People's Bank of China (PBoC) for private companies. Although year-to-date industrial profits in China fell by 7.8%, October showed an improvement with a 2.7% increase.

The PBoC is committed to supporting private enterprises by increasing bond issuance and encouraging lenders not to cut or suspend loans. Hawkish comments from RBA Governor Michele Bullock also bolstered the AUD, emphasizing the need for a proper response to demand-driven inflation.

The US Dollar Index (DXY) weakened despite improving US Treasury yields. Speculation about the easing of Fed policy contrasts with comments from Fed officials highlighting the need for further tightening, depending on inflation data.

This week is busy with speeches from RBA Bullock, retail sales, and inflation figures in Australia, which could provide potential insights into monetary policy. In the US, key economic data includes Annual GDP (Q3), Core PCE Price Index, and ISM Manufacturing PMI.

Market News Summary: Australian Dollar Rises Thanks to RBA's Hawkish Stance

The RBA has indicated the possibility of raising interest rates in response to rising inflation risks. Any further tightening decisions will depend on the evaluation of data and associated risks. NAB predicts the RBA will raise interest rates at the February 2024 meeting.

FOMC minutes stated that monetary policy would be tightened if recent information indicates insufficient progress toward inflation targets. FOMC members agreed that policy should remain restrictive until there is clear evidence that inflation is heading toward target.

Warning!

This analysis is based on fundamental and technical perspectives from trusted sources and is not intended as advice or recommendations. Always remember that this content aims to enrich readers' information. Always conduct your independent research on other forex information as a reference for your trading.

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