Tag Archives: Australian Dollar

Australian Dollar Surges to 7-Month High After Inflation Data

Australian Dollar Surges to 7-Month High After Inflation Data

  • Reserve Bank of Australia Faces Persistent Inflationary Pressures
  • Declining Chances of Australian Interest Rate Cuts This Year

 

 

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The Australian dollar jumped in Asian markets on Wednesday, reaching a seven-month high against its U.S. counterpart. This marks the second consecutive day of gains following the recent inflation data release in Sydney, which indicates that the Reserve Bank of Australia (RBA) continues to face persistent inflationary pressures.

 

These data have reduced the likelihood of the RBA easing its monetary policy and cutting Australian interest rates this year, making the Australian dollar one of the best investment opportunities available in the foreign exchange market.

 

 

 

Price Outlook

  • Australian Dollar Exchange Rate Today: The Australian dollar rose against the U.S. dollar by 0.3% to (0.6813),
    the highest level since January, from the day’s opening rate of (0.6792), with the lowest recorded at (0.6784).
  • On Tuesday, the Australian dollar gained approximately 0.3% against the U.S. dollar, marking its second rise in the last three days, as the U.S. currency continued to weaken following more pessimistic comments from Federal Reserve Chairman Jerome Powell at the Jackson Hole symposium.

 

 

 

 

 

 

Inflation in Australia

Data from the Australian Bureau of Statistics on Wednesday morning showed that the annual Consumer Price Index (CPI) rose by 3.5% in July, exceeding market expectations of a 3.4% increase. The index had recorded a 3.8% rise in June.

Service cost pressures remain stubbornly high in Australia, a disappointing outcome for RBA policymakers, leading markets to completely abandon hopes for any Australian interest rate cuts this year.

 

 

Reserve Bank of Australia

The minutes from the RBA’s latest meeting, held on August 6th, revealed that the bank decided to keep interest rates unchanged at 4.35%, the highest level in 13 years, for the sixth consecutive meeting. The minutes noted that Australian monetary policymakers had considered raising rates in their efforts to tame inflation.

 

 

Australian Interest Rates

Financial markets and economists believe that the RBA’s next move will be to ease monetary policy and cut interest rates, although there is disagreement about the timing. The current consensus is that this step will not begin until 2025.

 

 

 

 

Australian Dollar Surges to 7-Month High After Inflation Data

 

The Japanese Yen Retreats Despite New Warnings

The Japanese Yen Retreats Despite New Warnings: The yen’s value fell again to 154 yen to the dollar, giving up last week’s gains
even after Masato Kanda, the senior currency diplomat
the government is ready to combat unregulated foreign exchange movements driven by speculation.

 

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Oil Erases Gains to Hover Broadly

The Australian Dollar Retreats
The Japanese Yen Retreats Despite New Warnings

Oil Erases Gains to Hover Broadly

Brent futures erased their gains and settled at $83.5 per barrel on Tuesday,
not far from a nearly two-month low of $82.9 on May 3,
as perceptions of supply abundance outweighed lingering geopolitical concerns.
The Israeli military cabinet unanimously rejected a ceasefire agreement pressed by mediators and accepted
by Hamas before continuing its strikes in Rafah, Gaza.
Also, relatively weak supply in global markets prompted Saudi Arabia to raise the official selling price
of its light crude by 90 cents per barrel for June,
exceeding market estimates by 30 cents and increasing expectations that OPEC’s largest member
will push for production cuts extending into the year’s second quarter.

 

The Australian Dollar Retreats After the Reserve Bank of Australia’s Decision

The Australian dollar fell to around 0.66 US dollars, retreating from its two-month highs,
as the Reserve Bank of Australia kept the interest rate unchanged at 4.35% in a move widely expected.
Still, it did not provide a clear hawkish message that markets expected.
The Reserve Bank of Australia acknowledged that recent progress in reducing inflation had
stalled and maintained its future guidance of “not ruling out anything at home or abroad.”

The Japanese Yen Retreats Despite New Warnings

The yen’s value fell again to 154 yen to the dollar, giving up last week’s gains even after Masato Kanda,
the senior currency diplomat said the government is ready
to combat unregulated foreign exchange movements driven by speculation.
However, Kanda declined to confirm whether the Japanese authorities were behind the
suspected intervention last week when the yen rebounded by up to 5.2% from its lowest to highest.
Bank of Japan data indicates that it spent nearly $60 billion to defend the currency.
During the weekend, U.S. Treasury Secretary Janet Yellen also said
that interventions should be rare and consultations should occur,
indicating a lack of coordination between Japan and the United States on foreign exchange policy

 

 

The Japanese Yen Retreats Despite New Warnings