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US Economic Data Impact on Australian Dollar’s Strength

By Samir Al Khoury,

The Consumer Price Index rose year-on-year in Australia, recording 3.5% yesterday, which exceeded expectations and the previous reading (3.4%). The Manufacturing Purchasing Managers’ Index also recorded 49.9 points, which exceeded expectations. As for the unemployment rate, it was recorded at 3.8%, which is lower than expectations (3.9%).

These strong Australian economic indicators indicate increasing expectations that the Reserve Bank of Australia may be forced to maintain interest rates at their current levels, i.e. 4.35%, to control inflation, which is still far from the target rate, which stands at a range of 2% and 3%.

The price of the Australian dollar against the US dollar continues its upward trend for the fourth day in a row, recording 0.6518 today, but it is still declining by about 4% since the beginning of the year to date.

There is an important factor that may put negative pressure on the Australian dollar against the US dollar, which is the strength and flexibility of the US economy and the reduction of market bets on the timing of the start of the US interest rate cut, which supports the US dollar against all major currencies.

Analysts are closely awaiting tomorrow, Friday, the release of the core personal consumption expenditures price index in the United States of America, which is the Federal Reserve’s preferred inflation indicator. Therefore, caution must be exercised, as any reading that is higher than expectations for this index indicates a high possibility that it will reflect negatively on the Australian dollar pair against the dollar. American.

Regarding the technical aspect, according to Fibonacci, the price of the Australian dollar against the US dollar is likely to rise to the levels of 0.6556 (38.20%), 0.6616 (50%), 0.6676 (61.80%), and 0.6762 (78.60%).

As for the MACD indicator, colored blue, it exceeds the SIGNAL LINE, colored orange, in the negative zone.

Please note that this analysis is provided for informational purposes only and should not be considered as investment advice.

Taurex is the trading name of Zenfinex Global Limited, Stochastic Africa SL Ltd, Zenfinex Global LLC, and Zenfinex Limited.

Zenfinex Global Limited is registered in the Republic of Seychelles with registration number: 8428731-1 and is regulated by the Financial Services Authority of Seychelles (license number SD092). Its registered office address is F20, 1st Floor, Eden Plaza, Eden Island, Seychelles.

Stochastic Africa (SL) Limited is a company registered in Sierra Leone with Company Number: SL270319STOCH05271 and is licensed by the Bank of Sierra Leone under license number BSL/SAL/2023 and with the registered office at 148D Wilkinson Road, Freetown, Sierra Leone.

Zenfinex Global LLC is a company registered with the Financial Services Authority in Saint Vincent and the Grenadines under registered number 138 LLC 2019. Its registered office is Hinds Building, Kingstown, Saint Vincent, and the Grenadines.

Zenfinex Limited is a company registered in England and Wales under registered number: 11077380. Authorised and regulated by the Financial Conduct Authority under firm reference number 816055. Its registered office is 4th Floor, 4 Eastcheap, London, EC3M 1AE, United Kingdom.

*All trading involves risk.

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