- The Australian Dollar remains weak as RBA Governor Bullock highlighted that the risks associated with rising inflation have diminished.
- The RBA kept the Official Cash Rate unchanged at 4.35% during its final policy meeting of the year in December.
- The US Dollar continues to strengthen in anticipation of the US Consumer Price Index data set to be released on Wednesday.
The Australian Dollar (AUD) continues to decline after the Reserve Bank of Australia (RBA) decided to keep the Official Cash Rate (OCR) unchanged at 4.35% during its final policy meeting of the year. RBA Governor Michele Bullock, in a press conference, explained the decision to hold the interest rate at its 12-year high of 4.35% for the ninth consecutive meeting in December.
Governor Bullock noted that while the risks of inflationary pressures have eased, they still remain and warrant careful monitoring. The RBA will continue to assess economic indicators, including employment data, to inform future policy decisions.
On the global front, Chinese President Xi Jinping expressed confidence in achieving China’s economic targets for the year. He emphasized that China remains a key driver of global economic growth and highlighted the negative impacts of trade, tariff, and technology conflicts, asserting there are no winners in such disputes.
China’s trade surplus (CNY) expanded to CNY 692.8 billion in November, up from CNY 679.1 billion in October. Exports increased by 1.5% year-over-year in November, compared to a significant 11.2% growth in October, while imports rose by 1.2% year-over-year, rebounding from the previous 3.7% decline.
Meanwhile, the US Dollar (USD) continues its upward trajectory for the third consecutive day as traders adopt a cautious stance ahead of the US Consumer Price Index (CPI) data release on Wednesday. According to the CME FedWatch Tool, markets are pricing in an 85.8% probability of a 25 basis point rate reduction by the Federal Reserve on December 18.
The Australian Dollar weakens in anticipation of the RBA interest rate decision.
- Australia’s unemployment rate held steady at 4.1% in October for the third month in a row. The country saw an increase of 9,700 full-time positions and 6,200 part-time jobs, resulting in a net gain of 15,900 jobs overall.
- The RBA’s key inflation measure, the annual Trimmed Mean Consumer Price Index (CPI), slowed to 3.5% in the third quarter, down from 4.0%, yet still remains above the Bank’s target range of 2%-3%.
- In the third quarter, Australia’s economy grew at its slowest pace since the pandemic, with Gross Domestic Product (GDP) rising by just 0.3%, below the anticipated 0.4%. This disappointing growth led markets to nearly fully price in a rate cut of 96% by next April, up from 73% previously, based on Refinitiv interest rate probability data.
- In contrast, the US saw stronger-than-expected November jobs data, with Non-Farm Payrolls (NFP) rising by 227,000, well above forecasts, and Average Hourly Earnings growth remaining stable at 0.4% month-on-month.
- The Australian Dollar found support due to improved sentiment and expectations of economic stimulus from China. Chinese leaders have announced plans for fiscal and monetary measures aimed at boosting domestic consumption in 2024. However, weaker-than-expected Chinese CPI data (-0.6% in November) underscores the challenges in the recovery, further fueling expectations of stimulus actions.
Technical Analysis: Australian Dollar Falls Below 0.6450 to Reach Five-Month Low
The AUD/USD is trading around 0.6420 on Tuesday, with bearish momentum strengthening as per technical analysis. The pair remains within a descending channel, and the 14-day Relative Strength Index (RSI) is below 50, signaling ongoing negative sentiment.
To the downside, the pair has fallen below its five-month low of 0.6434, which was reached on November 26. A break below this level could open the door to the yearly low of 0.6348, last seen on August 5. Additional support is found near the lower boundary of the descending channel, around 0.6225.
Immediate resistance lies at the nine-day Exponential Moving Average (EMA) at 0.6449, followed by the 14-day EMA at 0.6465, which coincides with the upper boundary of the descending channel. A clear break above these resistance levels could lead to a potential rally toward the five-week high of 0.6687.
AUD/USD: Daily Chart
Australian Dollar PRICE Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.12% | -0.07% | -0.09% | 0.01% | 0.58% | 0.48% | -0.17% | |
| EUR | 0.12% | 0.05% | 0.02% | 0.12% | 0.70% | 0.62% | -0.05% | |
| GBP | 0.07% | -0.05% | -0.06% | 0.08% | 0.65% | 0.56% | -0.10% | |
| JPY | 0.09% | -0.02% | 0.06% | 0.12% | 0.69% | 0.59% | -0.06% | |
| CAD | -0.01% | -0.12% | -0.08% | -0.12% | 0.57% | 0.49% | -0.17% | |
| AUD | -0.58% | -0.70% | -0.65% | -0.69% | -0.57% | -0.09% | -0.74% | |
| NZD | -0.48% | -0.62% | -0.56% | -0.59% | -0.49% | 0.09% | -0.65% | |
| CHF | 0.17% | 0.05% | 0.10% | 0.06% | 0.17% | 0.74% | 0.65% |
