The Australian Dollar is experiencing a downward trend, marking its third consecutive day of losses against the US Dollar. This decline follows the release of mixed economic data from Australia, while traders are now closely watching the upcoming US Nonfarm Payroll (NFP) report for further insights into monetary policy.
Recent statistics revealed that Australia’s trade surplus increased to AUD 7.08 billion in November, surpassing forecasts of AUD 5.75 billion, and up from a revised AUD 5.67 billion the previous month. Exports rose by 4.8% month-on-month, a notable increase from October’s revised growth of 3.5%. In contrast, imports saw a smaller gain of 1.7% in November compared to the previous month’s flat performance.
Consumer spending, as indicated by Australia’s Retail Sales figures, showed a month-on-month increase of 0.8% in November. Although this was an improvement from October’s 0.5% growth, it fell short of market expectations which had anticipated a 1.0% rise. This discrepancy underscores some concerns about consumer confidence and economic momentum within the country.
Over in China, the Consumer Price Index (CPI) increased by a modest 0.1% year-on-year in December, slightly below November’s 0.2% rise. This figure aligns with market expectations, while monthly CPI remained flat at 0%. These developments add to the cautious outlook on economic performance in the region.
Meanwhile, the US Dollar strengthened as the yield on 10-year Treasury bonds rose, reaching near 4.73% in a prior session. The latest Federal Open Market Committee minutes revealed a consensus of caution among Fed officials regarding future interest rate cuts, taking into account various influences on inflation. Initial Jobless Claims also showed a decrease, reflecting the ongoing resilience of the labor market.
The Australian Dollar currently hovers around 0.6200 against the US Dollar, maintaining a bearish trend as it operates within a descending channel. Key support levels might be approached around 0.5980, while immediate resistance is observed near 0.6220. Analysts are predominantly focused on how forthcoming economic indicators will influence the RBA’s decisions regarding interest rates.
