Aussie gains as RBA rate-cut hopes fade
The Australian dollar was higher yesterday, with the AUD/USD climbing from three-week highs, ahead of today’s key Reserve Bank of Australia decision.
A Bloomberg survey found all 33 respondents expect the RBA to hold rates steady at 3.60%.
The RBA is likely to adopt a more cautious approach after last week’s August inflation report found an annualised headline result of 3.0% – a big jump from the 1.9% seen only back in June. Much of the move has been driven by the timing of electricity subsidies but the jump will be enough to give the RBA pause for thought.
The CPI increase has also caused economists to pare back expectations for future cuts. In the same Bloomberg survey, only 69% of economists expect a cut in November, down from 92% in last month’s survey.
The AUD/USD gained 0.5% while the NZD/USD gained 0.1%.
USD lower as shutdown threat clouds Friday jobs report
Across markets, the USD was weaker, with markets focused on the potential US government shutdown that could come as soon as Wednesday afternoon (APAC time).
If the US government does shut down, the Bureau of Labor Statistics may not release Friday’s payroll data.
Bloomberg noted that the BLS filed a contingency plan in March stating it would halt all operations during a shutdown. So far, the agency hasn’t commented on this latest episode, leaving its plans unclear.
During the 34-day shutdown in 2018–19, the BLS published data thanks to advance funding from Congress. But in October 2013, no such funding was provided, and the agency shut down along with other departments.
USD/SGD has pulled back over the past two sessions. The next key support sits at 1.2853, the 50-day moving average. USD buyers may look to take advantage later. Resistance remains at the psychological 1.3000 level.
China profit surprise lifts mood, USD/CNH dips
China’s industrial profits surged 20.4% in August, marking the first rise in four months. The jump came off a low base and stronger margins, according to data from the National Bureau of Statistics. Profits for the first eight months of the year edged up 0.9%, defying forecasts for a 1.6% drop.
Factory deflation eased for the first time in half a year, helped by Beijing’s push to curb overcapacity. Still, the outlook for profits at factories, mines and utilities remains uncertain, weighed down by weak domestic demand and ongoing US tariff risks.
USD/CNH has dipped, and dollar buyers may be watching for a rebound. Resistance sits at 7.1302, the 21-day moving average, with the next level at 50-day moving average of 7.1476.
Aussie stronger with RBA due
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 29 September – 3 October
Have a question? [email protected]
*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
