Contents
Australian Dollar lose as the AiG Industry Index for September witnessed a decline to -9.9. Which marking a substantial decrease from the prior reading of -3.5. Concurrently, Building Permits (Month-on-Month) experienced a notable contraction of 4.6%. That deviating from the market consensus of a 1.3% increase. Also representing a significant departure from the previous growth of 7.0%.
On a positive note, Australia’s Retail Sales (Month-on-Month) demonstrated robust performance by surging to 0.9% in September. Surpassing market expectations of 0.3% and the prior figure of 0.2%. Furthermore, the Australian Consumer Price Index (CPI) for the third quarter of 2023 displayed resilience by reaching 1.2%. Which exceeding both the 0.8% uptick in the preceding quarter and the market consensus of 1.1% for the same period.
The Reserve Bank of Australia expressed heightened concerns about inflationary pressures originating from supply shocks. Michele Bullock, the Governor of the Reserve Bank of Australia, conveyed that in the event of inflation persisting above projections, the RBA stands ready to implement appropriate policy measures. Concurrently, there is a discernible deceleration in demand. With per capita consumption on a declining trajectory.
China’s Economic Indicators and Implications for Australian dollar lose and the U.S dollar
In China with the context of Australian Dollar lose, the Caixin Manufacturing Purchasing Managers’ Index (PMI) for October recorded a decline. Settling at 49.5, contrasting with September’s expansion at 50.6. As indicated by the latest data release. The release of Chinese Purchasing Managers’ Index (PMI) data on Tuesday has raised concerns about the subdued economic condition of the world’s second-largest economy. Given Australia’s significant trade relationship with China, there is an increased likelihood that these developments will exert influence on the Australian Dollar.
Furthermore, China’s NBS Manufacturing PMI took an unexpected turn in September. It contracting to 49.5, down from the 50.2 expansion observed in July. Also falling short of the market consensus of 50.2. Chinese NBS Services PMI also decline. Dropping to 50.6 in September, in contrast to the anticipated figure of 51.8 and the previous reading of 51.7.
Reports suggest a tentative agreement between the United States and China for a meeting between Presidents Joe Biden and Xi Jinping in November. This development comes after several months of strategic diplomatic efforts to enhance bilateral relations.
Economic Trends in the United States: Inflation and Consumer Sentiment
In the United States, the Core Personal Consumption Expenditures Price Index (Year-on-Year) witnessed a slight reduction to 3.7%. In which from the prior reading of 3.8%. However, the monthly index demonstrated an increase to 0.3%. That aligning with expectations and up from 0.1% in the previous reporting period. Additionally, the University of Michigan Consumer Index exceeded expectations in October. Which reporting a figure of 63.8, surpassing the anticipated level of 63.0.
Also Read: Australian Dollar downs amid US Dollar Strengthens
Investors remain vigilant, closely monitoring key indicators such as the US ADP Employment Change and ISM Manufacturing PMI for October in anticipation of the upcoming Federal Reserve policy decision. Expectations are that interest rates will be retained at the prevailing level of 5.5% during the forthcoming meeting scheduled for Wednesday.
Analysis of the Australian Dollar’s Consolidation and Resistance Levels
With the fact of The Australian Dollar lose, it is presently undergoing a consolidation phase beneath the pivotal level of 0.6350, with the annual low of 0.6270 potentially serving as a robust support, closely aligned with the significant milestone at 0.6250. Conversely, our attention is directed towards the critical resistance point positioned at the 50-day Exponential Moving Average (EMA) of 0.6400. A successful breach of this resistance level holds the potential to propel the currency towards the 23.6% Fibonacci retracement point, situated at 0.6419.
Sourse: FX Street
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Disclaimer:
Please note that this article serves solely for informational purposes. As such, it is not financial advice. We strongly advise readers to conduct thorough research and consult with financial professionals before making any investment decisions.
