The Australian Dollar (AUD) halted its rise after consecutive gains since February 14, influenced by the drop in the S&P/ASX 200 on Monday due to tensions between China and Taiwan. Despite this, the Australian market opened higher, reflecting optimism after Wall Street hit record highs on Friday, aligned with Nvidia's outstanding results driving strong demand for artificial intelligence products.
 
It is anticipated that the Australian Dollar will remain weak as investors await key economic data, including Australia's Monthly Consumer Price Index and Retail Sales. However, recent data shows a revival in private sector activity in February, particularly in the services sector, providing support for an increase in AUD.
 
The US Dollar Index (DXY) stabilized after two consecutive sessions of gains, supported by strong employment figures and mixed US PMI data, reinforcing arguments for the Federal Reserve to raise interest rates in response to inflationary pressures. Market participants will monitor key economic indicators such as Gross Domestic Product, Core Personal Consumption Expenditures, and ISM Manufacturing PMI later this week, along with the Fed's Monetary Policy Report.
 
Daily Summary Market: Australian Dollar Weakens
 
  1. Australia's Composite PMI rose to 51.8 in February from 49, indicating expansion in the private sector after five months of contraction.
  2. Australia's Services PMI increased to 52.8 from 49.1, while the manufacturing PMI fell to 47.7 from 50.1 due to a decline in new orders.
  3. TD Securities economists forecast the first rate cut from the RBA of 25 bps in November, not earlier in August.
  4. RBA Meeting Minutes: The Board considered a 25 bps rate hike, although returning inflation to target will take time.
  5. China's Ministry of Commerce rejected US statements about 'overcapacity' as unilateral and hegemonic actions.
  6. Chinese Fujian Coast Guard increased patrols in waters around Kinmen, Taiwan, to maintain operational order and ensure fishermen's safety.
  7. Commerzbank economists predict a FOMC rate cut possibly in June, with five rate cuts in 2024-2025.
  8. New York Fed President John C. Williams anticipates a rate cut later this year, depending on economic conditions.
  9. Fed Governor Christopher J. Waller: Delay any rate cuts to assess whether January's inflation is an anomaly.
  10. S&P Global US Services PMI for February at 51.3, below expectations of 52.0.
  11. US Manufacturing PMI Global S&P rose to 51.5, exceeding expectations of 50.5.
  12. US Composite PMI Global S&P fell to 51.4 in February from 52.0 previously.
  13. Initial US unemployment claims fell to 201,000, against expectations of 218,000 and previous data of 213,000.
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