Australian Dollar extends gains above a major level, focus on US data
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Australian Dollar continues to reach fresh highs on the subdued US Dollar. Australian robust economic conditions influence the RBA to maintain its hawkish stance. China’s NDRC’s Chairman, Zheng Shanjie mentioned that China will strive to expand domestic demand. Investors await US data releases to gain further impetus on the Fed’s stance. The Australian Dollar (AUD) continues to gain ground on Thursday as the US Dollar (USD) fell below the 101.00 mark, influenced by subdued US Treasury yields. The AUD/USD pair receives additional upward support from improved risk appetite, with investors speculating on a dovish stance from the Federal Reserve (Fed) regarding interest rates in early 2024. Australia’s inflation and housing prices are displaying resilience, potentially influencing the Reserve Bank of Australia (RBA) to maintain its hawkish stance. The latest RBA forecasts are nearing the upper boundary of the 2-3% inflation target by the end of the year 2025. In its recent Meeting Minutes, the RBA emphasized the importance of carefully examining additional data to assess the balance of risks before making future interest rate decisions. There is widespread anticipation that the RBA will refrain from a rate cut in February’s policy meeting. China’s National Development and Reform Commission’s (NDRC) Chairman, Zheng Shanjie, has expressed the country’s commitment to implementing familiar policy measures. In a meeting held on Tuesday, Zheng mentioned that China will strive to expand domestic demand, ensuring a speedy economic recovery, and promoting stable growth. The US Dollar Index (DXY) experiences continued weakness as the market anticipates potential rate cuts by the Federal Reserve (Fed) in the first quarter of the upcoming year. This expectation stems from the Fed’s policy pivot in December, where the dot plot of rate expectations suggested the possibility of up to three cuts, amounting to a total of 75 basis points in rate…
Filed under: News - @ December 28, 2023 3:20 am