Australian Dollar: Gradual gains against US Dollar remain likely – MUFG

FXStreet Insights Team FXStreet

MUFG’s Michael Wan reports the Reserve Bank of Australia kept its policy rate at 4.35% in a unanimous decision. AUD/USD initially dipped on the statement but later rebounded as Governor Bullock reiterated hawkish inflation concerns. MUFG’s global team expects AUD/USD to move gradually above 0.70, driven mainly by risk sentiment, Fed rate cuts and a weaker Dollar.

RBA steady, currency outlook firmer

"The Reserve Bank of Australia (RBA) kept its policy rate at 4.35% yesterday in a unanimous decision."

"The AUD/USD initially dipped after the policy statement release; however it later rebounded when RBA Governor Michele Bullock reiterated hawkish statements, by warning of persistent inflation risks and stated during her press conference that future rate hikes remain on the table if inflation stays sticky."

"The RBA nonetheless remained cautious about other key external risks, such as larger or more persistent negative effects of the Middle East conflict."

"The RBA also highlighted a softer property market including through weaker wealth effects, rising interest rates, and tighter investment property tax rules as an important transmission mechanism to aid its mandate of bringing down inflation, with the RBA’s consumption forecast also seeing a downward revision by year end from 1.9% to 1.6%."

"Overall, our global team thinks that AUD/USD is likely to move gradually higher above the 0.70 levels but less so because of further rate hikes by RBA, but driven more by risk sentiment, Fed rate cuts, and a weaker Dollar moving forward."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD trims gains, hovers around 1.3520 on US CPI data

GBP/USD adds to the weekly move higher and keeps the trade above the 1.3500 threshold on Wednesday. Cable’s extra recovery follows the modest selling pressure on the Greenback after US CPI readings matched consensus in July.

EUR/USD retargets 1.1550 on US inflation

EUR/USD picks up some traction and flirts with the 1.1550 region on Wednesday. The pair’s modest advance comes as the US Dollar gathers some steam after US CPI data matched estimates last month.

Gold clings to gains above $4,400 post-US CPI

Gold reverses the recent weakness and reclaims the area past the $4,400 mark per troy ounce on Wednesday. The precious metal’s recovery picks up pace and exceedes the $4,400 level in the wake of the release of in-line US inflation figures in July and the marginal gains in the US Dollar.

Ripple lags recovery as exchange reserves expand

Ripple is trading within a broadly constrained technical structure, with support at $1.00 and key moving averages limiting its recovery potential. In August, the remittance token declined by approximately 6.5%, extending its total pullback to around 14% from July's $1.18 peak.

911 million shares freed: Why SpaceX rallied into its own supply

The most heavily trailed supply event of the year landed on August 6, and the SpaceX (SPCX) stock went up. Roughly 911.5 million shares held by insiders and early backers became eligible to trade, around 43% more than the entire float sold at the listing.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.