- Australian Dollar stays weak following the remarks from RBA Governor Michele Bullock.
- RBA’s Bullock said the central bank will continue to monitor data and evolving risks closely to guide its policy decisions.
- The White House said US firms will control TikTok’s algorithm, with Americans holding six of seven board seats.
The Australian Dollar (AUD) declines against the US Dollar (USD) on Monday, extending its losses for the fourth successive session. The AUD/USD pair continues its losing streak as the Greenback remains stronger after the Federal Reserve (Fed) indicated no rush to lower borrowing costs quickly in the coming months after delivering an expected rate cut last week.
Reserve Bank of Australia (RBA) Governor Michele Bullock told parliament on Monday that labor market conditions have eased slightly, with unemployment ticking higher, though the market remains tight and near full employment. Bullock noted that recent rate cuts should support household and business spending, while stressing that the RBA must stay vigilant to changing conditions and be ready to respond if needed. The Board, she added, will continue to monitor data and evolving risks to guide its decisions closely.
The People’s Bank of China (PBOC), China’s central bank, announced that it would leave its Loan Prime Rates (LPRs) unchanged on Monday. The one-year and five-year LPRs were at 3.00% and 3.50%, respectively.
The White House announced that US companies will take control of TikTok’s algorithm, while Americans will occupy six of seven board seats for its US operations. White House Press Secretary Karoline Leavitt said the agreement could be finalized “in the coming days,” though Beijing has not yet commented.
Australian Dollar holds losses as US Dollar extends winning streak
- The US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, is gaining ground and trading around 97.70 at the time of writing. The focus this week is on the latest Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred inflation gauge, which is expected to signal subdued price pressures.
- The US Department of Labour (DOL) released on Thursday, the Initial Jobless Claims went down to 231K for the week ending September 13. The latest print came in short of initial estimates of 240K and was lower than the previous week’s 264K (revised from 263K). Meanwhile, Continuing Jobless Claims shrank by 7K to 1.920M for the week ending September 6.
- The Federal Reserve (Fed) lowered the funds rate by 25 basis points (bps) last week, marking the first cut of the year, and signaled a further 50 bps of easing before year-end, slightly above its June projections.
- Fed Chair Jerome Powell pointed to growing signs of weakness in the labor market to explain why officials decided it was time to cut rates after holding them steady since December amid concerns over tariff-driven inflation.
- China’s Ministry of Industry and Information Technology unveiled a two-year plan to stabilize the steel sector, target 4% annual value-added growth, and strictly restrict production expansion.
- Australia’s seasonally adjusted Employment Change arrived at -5.4K in August from 26.5K in July (revised from 24.5K), compared with the consensus forecast of 22K. Meanwhile, the Unemployment Rate steadied at 4.2% in August, as expected.
- The Reserve Bank of Australia (RBA) rate cuts. Markets now price just a 20% chance of a September cut, while odds for November stand at 70%, with above-target inflation keeping policymakers cautious.
Australian Dollar eyes 0.6550 support near 50-day EMA
The AUD/USD pair is trading around 0.6590 on Monday. Technical analysis on the daily chart shows that the pair has broken below the ascending channel, indicating a potential for a bearish shift. However, the 14-day Relative Strength Index (RSI) remains above the 50 level, suggesting the bullish bias is still in play.
The AUD/USD pair may find its initial support at the crucial level of 0.6550, aligned with the 50-day EMA at 0.6548. A break below the support zone would weaken the medium-term price momentum and put downward pressure on the pair to navigate the region around the three-month low at 0.6414, which was recorded on August 21.
On the upside, a successful break above the nine-day EMA at 0.6613, which is aligned with the lower boundary of the ascending channel. A rebound to the channel would support the short-term price momentum and lead the AUD/USD pair to approach the 11-month high of 0.6707, recorded on September 17, followed by the ascending channel’s upper boundary around 0.6720.
AUD/USD: Daily Chart
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.15% | 0.09% | 0.27% | 0.13% | 0.09% | 0.16% | 0.35% | |
| EUR | -0.15% | -0.05% | 0.07% | -0.05% | -0.11% | -0.02% | 0.15% | |
| GBP | -0.09% | 0.05% | 0.08% | 0.03% | -0.03% | 0.06% | 0.26% | |
| JPY | -0.27% | -0.07% | -0.08% | -0.15% | -0.21% | -0.11% | 0.06% | |
| CAD | -0.13% | 0.05% | -0.03% | 0.15% | -0.06% | 0.04% | 0.24% | |
| AUD | -0.09% | 0.11% | 0.03% | 0.21% | 0.06% | 0.09% | 0.30% | |
| NZD | -0.16% | 0.02% | -0.06% | 0.11% | -0.04% | -0.09% | 0.16% | |
| CHF | -0.35% | -0.15% | -0.26% | -0.06% | -0.24% | -0.30% | -0.16% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
RBA FAQs
The Reserve Bank of Australia (RBA) sets interest rates and manages monetary policy for Australia. Decisions are made by a board of governors at 11 meetings a year and ad hoc emergency meetings as required. The RBA’s primary mandate is to maintain price stability, which means an inflation rate of 2-3%, but also “..to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people.” Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will strengthen the Australian Dollar (AUD) and vice versa. Other RBA tools include quantitative easing and tightening.
While inflation had always traditionally been thought of as a negative factor for currencies since it lowers the value of money in general, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Moderately higher inflation now tends to lead central banks to put up their interest rates, which in turn has the effect of attracting more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in the case of Australia is the Aussie Dollar.
Macroeconomic data gauges the health of an economy and can have an impact on the value of its currency. Investors prefer to invest their capital in economies that are safe and growing rather than precarious and shrinking. Greater capital inflows increase the aggregate demand and value of the domestic currency. Classic indicators, such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can influence AUD. A strong economy may encourage the Reserve Bank of Australia to put up interest rates, also supporting AUD.
Quantitative Easing (QE) is a tool used in extreme situations when lowering interest rates is not enough to restore the flow of credit in the economy. QE is the process by which the Reserve Bank of Australia (RBA) prints Australian Dollars (AUD) for the purpose of buying assets – usually government or corporate bonds – from financial institutions, thereby providing them with much-needed liquidity. QE usually results in a weaker AUD.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Reserve Bank of Australia (RBA) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the RBA stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It would be positive (or bullish) for the Australian Dollar.
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