AUD/USD hits 11-month high on improved risk sentiment and robust PMI data – BBH
AUD/USD broke higher through key resistance level at 0.6600, reaching its highest level since August 2024. Improved financial market risk sentiment from easing trade tensions, rising iron ore prices, and faster Australian private sector growth momentum underpin the rally in AUD, BBH FX analysts report.
PMIs boost Aussie
"Australia’s composite PMI increased to 53.6 vs. 51.6 in June, the highest since April 2022. The improvement was broad-based with faster service sector growth and a renewed expansion in manufacturing production."
"Meanwhile, RBA Governor Michele Bullock stuck to the bank’s guidance for 'a measured and gradual approach' to monetary policy easing. Bullock brushed off Australia’s weak June labor force report noting that 'leading indicators are not pointing to further significant increases in the unemployment rate in the near term.' Bullock also warned that 'the monthly CPI Indicator data, which are volatile, suggest that the fall in trimmed mean inflation over Q2, due next week may not be quite as much as we forecast back in May.' The RBA forecasts trimmed inflation of 2.6% y/y in Q2 vs. 2.9% in Q1."
"The RBA looks set to resume easing on August 12. RBA cash rate futures continue to fully price-in a 25bps cut in August and 75bps of total easing in the next 12 months."
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FXStreet Insights Team
FXStreet
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