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24/06/24
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AUD/USD Trading Upwards as Markets Expect Australian Consumer Confidence Readings
AUD moved towards the upside against USD on June 24. Around 2:05 p.m. (GMT), AUD/USD was trading around 0.66670, representing a 0.4 percent increase. Markets look forward to Westpac Consumer Sentiment on June 25; consumer confidence’s weakness prompted a 0.3 percent decline to 82.4 last month, after a 2.4 percent decline in the previous month.
The weak economy has led to pessimism among consumers and there are concerns that sticky inflation could influence the Reserve Bank of Australia’s decision to raise interest rates. The apex bank has sustained its “higher for longer” stance, keeping rates unchanged at 4.35 percent over the past five meetings. The RBA warned that interest rate hikes may be delivered if pressure from inflation continues to remain the same.
Two months ago, CPI came in at 3.6% relative to March’s 3.5% and a forecast of 3.5%. The CPI report for May will be released on June 26 and is expected to rise to 3.8 percent. The RBA is likely to be compelled to express potential rate hikes if inflation rises again.
The Australian economy recorded a 0.1 percent gain in Q1 2024 while the labor market remained tight, dampening hopes of any imminent rate cut. No economic data is expected from the U.S. on June 24, but markets look forward to comments from FOMC members Christopher Waller and Mary Daly to obtain some insights regarding the Federal Reserve’s rate path.
The stickier-than-anticipated inflation rate has prompted a hawkish tone from the Fed, and CME’s FedWatch shows that markets are pricing in a 60% chance of a rate cut in September.
A look at the chart of AUD/USD shows that there has been a visit to the barrier level at 0.6655. Another barrier level exists at 0.6685, while support levels are located at 0.6591 and 0.6541.
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