Australian Dollar remains steady following the release of key Chinese data
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The Australian Dollar holds ground after mixed figures from China. China’s Retail Sales (YoY) rose 3.0% in November, falling short of the expected 4.6% and previous 4.8% readings. The US Dollar remains subdued as the Fed is expected to deliver a 25 basis point rate cut on Wednesday. The Australian Dollar (AUD) halts its four-day losing streak on Monday as the US Dollar (USD) edges lower amid tepid US Treasury yields ahead of the Federal Reserve’s (Fed) interest rate decision set for Wednesday. The Fed is widely expected to announce a 25 basis point rate cut in its final monetary policy meeting of 2024. According to the CME FedWatch tool, markets are now almost fully pricing in a quarter basis point cut at the Fed’s December meeting. China’s Retail Sales (YoY) rose 3.0% in November, against its expected 4.6% and previous 4.8% readings. Meanwhile, annual Industrial Production increased by 5.4%, exceeding the market consensus of a 5.3% rise. Chinese authorities, led by President Xi Jinping, have pledged to raise the fiscal deficit target next year, shifting policy focus to consumption to boost the economy amid looming 10% US tariffs threatening exports. The lack of concrete details on fiscal support has put downward pressure on the AUD, given China’s status as Australia’s largest trading partner. Australian Dollar receives downward pressure from the RBA’s dovish stance The Aussie Dollar faced additional challenges due to the Reserve Bank of Australia’s (RBA) dovish stance. Traders are increasing their bets that the RBA will cut interest rates sooner and more significantly than initially expected. However, future decisions will be data-driven, with evolving risk assessments guiding the RBA’s approach. The preliminary Australia’s Judo Bank Manufacturing Purchasing Managers Index (PMI) declined to 48.2 in December from 49.4 in November. Meanwhile, the Services PMI eased to 50.4 in…
Filed under: News - @ December 16, 2024 2:22 am