AUDUSD – Daily Chart
The price of AUDUSD is trading between two support levels which marked lows in 2024 and 2022. Support below is at 0.617, while resistance for a move higher is at 0.6285.
RBA meeting minutes are released on Tuesday at 8:30am HKT. Softer US inflation data for November has added to market expectations that the Federal Reserve will continue to ease its monetary policy over the next year. However, according to the CME FedWatch tool, markets now expect with a more than 90% probability that the Fed will keep interest rates unchanged in January, within the current range of 4.25%–4.50%.
The Reserve Bank of Australia is expected to begin cutting its own cash rate as early as February, due to further signs of an economic slowdown. Traders will be looking for further clues from the RBA’s meeting minutes due on Tuesday. The central bank recently held its interest rates steady at 4.35% for the ninth consecutive meeting.
US PCE inflation, the Fed’s preferred inflation measure, rose year-over-year by 2.8%, slower than estimates of 2.9%. The monthly core inflation figure was slightly higher by 0.1%, against estimates of 0.2% and the prior release of 0.3%.
Australia’s Private Sector Credit grew by 0.5% month-over-month in November, aligning with market expectations. This followed a 0.6% increase in October, which was the fastest monthly growth in four months. On an annual basis, Private Sector Credit rose by 6.2% in November, the highest growth rate since May 2023.
Reserve Bank of Australia Governor Michele Bullock has said that continued strength in the labor market is the key reason the bank has been slower than other nations to commence its monetary easing cycle. But she did keep the door open for a rate cut in February at the bank’s December meeting. She said she has more confidence that inflation is falling toward the central bank’s target of 2-3%.
The International Monetary Fund said that Australia is one of the most resilient countries in the world and could still see a soft landing in the economy.
According to the latest update from the IMF, Australia’s economy is tipped to grow from 1.2% in 2024 to 2.1% in 2025 as real income growth and tax cuts potentially boost private consumption while public demand remains strong.
“Australia remains on a narrow path to a soft landing, but risks are tilted to the downside. Growth slowed in the first half of the year, with household consumption weak as real incomes remained soft,” the group board said.