- AUD/USD slides to near 0.6740 as the US Dollar gains ground after Fed Powell’s speech.
- Fed Powell reiterated the need of more good inflation data for reducing interest rates.
- Investors await the US Retail Sales and the Aussie Employment data.
The AUD/USD pair drops sharply to 0.6740 in Tuesday’s European session. The Aussie asset declines as the US Dollar (USD) manages to get firm-footing as Federal Reserve (Fed) Chair Jerome Powell recognized the need of more soft inflation for policymakers to gain greater confidence before cutting interest rates in his speech at the Economic Club of Washington on Monday.
However, Fed Powell acknowledged that the central bank has made some progress on inflation in the second quarter. Powell said, "We've had three better readings, and if you average them, that's a pretty good place," Reuters reported. His comments on progress in disinflation fuelled confidence that rate cuts are not so far.
Meanwhile, the Fed is widely anticipated to start reducing interest rates from the September meeting. Also, traders bet that there will be two rate cuts instead of one, as signaled by officials in the latest dot plot.
Firm speculation that the Fed will start reducing interest rates from the September meeting has increased risk-appetite of investors. S&P 500 futures have posted nominal gains in European trading hours. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, steadies above 104.00.
Going forward, investors will focus on the United States (US) monthly Sales data for June, which will be published at 12:30 GMT data. The Retail Sales are estimated to have remained unchanged.
In the Asia-Pacific region, investors await the Australian Employment data for June scheduled for Thursday. Economists expect that there were 20K fresh payrolls against 39.7K onboarded in May. The Unemployment Rate is expected to have remained steady at 4.0%. Signs of tight labor market conditions would boost expectations of further policy-tightening by the Reserve Bank of Australia (RBA). Currently, investors expect that the RBA will join the global rate-cut trend next year.
Economic Indicator
Employment Change s.a.
The Employment Change released by the Australian Bureau of Statistics is a measure of the change in the number of employed people in Australia. The statistic is adjusted to remove the influence of seasonal trends. Generally speaking, a rise in Employment Change has positive implications for consumer spending, stimulates economic growth, and is bullish for the Australian Dollar (AUD). A low reading, on the other hand, is seen as bearish.
Read more.Next release: Thu Jul 18, 2024 01:30
Frequency: Monthly
Consensus: 20K
Previous: 39.7K
Source: Australian Bureau of Statistics
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds steady near 1.0900 after ZEW sentiment data
EUR/USD fluctuates near 1.0900 on Tuesday. The data published by ZEW showed that the Economic Sentiment Index for Germany and the Eurozone declined sharply in July, making it hard for the Euro to find demand, as focus shifts to US Retail Sales data.
GBP/USD bounces off 1.2950 ahead of US data
GBP/USD has recaptured the 1.2950 barrier in European trading on Tuesday, reverting toward the 2024 high of 1.2995. The pair shrugs off a cautious market mood, as the US Dollar stalls its rebound ahead of the US Retail Sales data and Fedspeak.
Gold climbs to multi-week highs above $2,440
Gold gathers bullish momentum and trades at its strongest level since late May above $2,440. The benchmark 10-year US Treasury bond yield loses more than 1% on the day below 4.2%, helping XAU/USD push higher on Tuesday.
Bitcoin price consolidates near $62,000 despite liquidation of $71.02 million in short position and surge in Open Interest
Bitcoin (BTC) sees a 3% price decline on Tuesday, trading around the $63,000 level at the time of writing. On-chain data shows a liquidation of $71.02 million in short positions and a rise in open interest.
ECB bank lending survey shows only modest pickup in expected loan demand
While the economy has returned to growth and interest rates are coming down, loan demand is only modestly improving as bank credit standards remain tight. For the ECB, there is nothing in the data that moves the needle for coming rate cuts.