Australian Dollar Forecast on AUD/USD: Focus on Fed Actions and China's Economic Performance

Sunday, 15 September 2024, 17:06

Australian dollar trends are influenced by recent Fed policies and China's economic performance. The AUD/USD pair stands poised at a critical threshold, with potential movements contingent on upcoming data releases and market forecasts. In light of the deteriorating economic signals from China, the outlook for the AUD remains uncertain.
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Australian Dollar Forecast on AUD/USD: Focus on Fed Actions and China's Economic Performance

Current Economic Indicators Impacting the Australian Dollar

Economic data from China continues to shape the future of the Australian dollar. Recent reports indicate that while house prices are falling, industrial production is growing at a slower pace. Lower retail sales and rising unemployment also contribute to softer domestic conditions.

Effect of China on Australian Exports

  • Lower demand from China means reduced need for key exports like coal and iron, potentially weakening the AUD.
  • Iron ore prices are particularly vulnerable, possibly leading to adverse trade terms.
  • With 20% of Australia’s workforce in trade-related jobs, the impact on the economy could be significant.

Expert Insights on RBA Rate Expectations

Shane Oliver, AMP Head of Investment Strategy, believes the RBA's rate path may shift in response to global economic perceptions. The anticipated 0.25% rate cut carries a 92% probability, indicating strong market sentiment regarding easing.

US Economic Indicators and AUD/USD Trends

  • The outlook for AUD/USD depends significantly on upcoming US manufacturing data.
  • Weak data could bolster the likelihood of a 50-basis point cut from the Fed.
  • Market reactions will also hinge on Australia's labor market conditions.

AUD/USD Technical Analysis

The AUD/USD remains solidly above key EMA levels, underpinning bullish signals. A return to $0.67500 could pave the way for further gains, while a fall below $0.67050 may suggest a bearish trend ahead.

Investors are advised to keep a close watch on economic updates and adjust trading strategies accordingly.

This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


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