- AUD/USD keeps early Asian session rebound amid upbeat data from Australia’s biggest customer.
- China’s Industrial Production, Retail Sales flashed firmer data for August.
- RBA’s Lowe defends recent rate hikes, praises economic conditions while favoring slower rate hike at some point.
- Risk catalysts, second-tier US will be important ahead of the key FOMC.
AUD/USD treads water around the 0.6700 threshold as mixed catalysts test the bears around the yearly low during Friday’s Asian session. The Aussie pair’s latest hesitance to welcome sellers could be linked to China data.
That said, China’s Industrial Production rose 4.2% YoY versus 3.8% expected and prior while Retail Sales rose past 3.5% market expectations and 2.7% prior to 5.4%. Further, Reuters said, “China's new home prices fell in August at the fastest pace since November 2021 as its property sector was plagued by weak demand, a mortgage boycott and strict COVID-19 restrictions.”
Also read: China’s August Retail Sales and Industrial Output surprise positively
Earlier in the day, Reserve Bank of Australia (RBA) Governor Philip Lowe crossed wires, via Reuters, as he presented a Testimony in front of the Aussie parliament. In doing so, RBA’s Lowe tried defending the aggressive rate hikes while saying, “Now that inflation is as high as it is, we need to make sure that inflation returns to target in a reasonable time.” The policymaker also stated that Australia in much better position than Fed because wages still contained.
Following the update, Bloomberg said, “Australia’s central bank chief Philip Lowe said the case for outsized interest-rate increases has “diminished” now that the cash rate is approaching “more normal settings,” suggesting smaller moves ahead.”
Although the aforementioned catalysts challenge the AUD/USD pair’s downside moves, the bears keep reins amid hawkish Fed bets and firmer US data, not to forget upbeat yields. That said, the latest readings of the hawkish Fed bets from the CME’s FedWatch Tool suggest the market priced in the Fed’s 0.75% and 1.0% rate hikes during the next week’s FOMC with 77% and 23% chances.
Amid these plays, S&P 500 Futures drop 0.65% intraday by the press time, poking the one-week low around 3,990 while the US 10-year Treasury yields dropped 1.7 basis points to 3.442% after rising 1.38% the previous day.
Moving on, preliminary readings of the Michigan Consumer Sentiment Index (CSI), expected 60 versus 58.2 prior, will be crucial for intraday directions. However, major attention will be on the next week’s Fed meeting. Also important to watch will be the chatters surrounding China and Europe.
Technical analysis
AUD/USD buyers need a clear upside break of May’s low near 0.6830 to lure short-term buyers. However, a four-month-old bearish channel between 0.7060 and 0.6535 could keep the pair sellers hopeful.
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
AUD/USD looks at the RBA for near-term direction
AUD/USD resumed its rebound and briefly surpassed the 0.6600 barrier on the back of the renewed and marked resurgence of the downward bias in the US Dollar. Investors, in the meantime, expect the RBA to keep its rates unchanged on Tuesday.
EUR/USD: Price action hinges on the US election and the Fed
EUR/USD managed to trespass the key 1.0900 hurdle and print new highs following the Greenback’s offered stance as investors warmed up for the US election and the FOMC event later in the week.
Gold trades around $2,730
Gold price is on the defensive below $2,750 in European trading on Monday, erasing the early gains. The downside, however, appears elusive amid the US presidential election risks and the ongoing Middle East geopolitical tensions.
Ethereum Price Forecast: ETH struggles below $2,500 amid State of Michigan pension fund investment in ETH ETF
Ethereum (ETH) is trading near $2,420, down about 1% on Monday, but could bounce off a key descending trendline close to the $2,258 historically high demand zone.
US presidential election outcome: What could it mean for the US Dollar? Premium
The US Dollar has regained lost momentum against its six major rivals at the beginning of the final quarter of 2024, as tensions mount ahead of the highly anticipated United States Presidential election due on November 5.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.