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29/07/24
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AUD Begins Week in Negative Territory
On Monday, the Australian dollar was in negative territory again after on Friday ending a nasty slip. AUD/USD traded at about 0.6537, down 0.17% for the day in the North American session. The Australian dollar has been skidding since July 15 and declined 3.7% versus the US dollar.
The data calendar is light today, with no events out of Australia or the US.
Fed policymakers including Federal Chair Jerome Powell have in recent weeks been dovish as inflation has dropped. The PCE inflation data on Friday also strengthened the case for a rate cut in September, and according to the CME’s FedWatch tool, the markets are pricing in a 0.25% cut at 89% and a 0.5% cut at 10%, which means a rate cut is practically certain.
Although the Fed will also meet this week the market focus is on the September meeting, where the Fed will likely cut rates for the first time since March 2020. This week’s meeting will likely set the stage for a rate cut in September and the markets will be focused on the rate statement and Powell’s press conference afterwards.
The US PCE Price index was released on Friday and inched down from 2.6% in May to 2.5% y/y in June.
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