Australian Dollar consolidates as traders adopt caution ahead of US PCE Price Index

The Australian Dollar steadies after mixed economic data from Australia and China’s NBS PMI released on Thursday.
Australian Retail Sales rose by 0.1% MoM in September, against the expected 0.3% and the previous 0.7% growth.
Traders await the upcoming US PCE inflation data on Thursday and Nonfarm Payrolls on Friday.

Akhtar Faruqui FXStreet

The Australian Dollar (AUD) remains steady following the release of mixed economic data from Australia and China’s NBS Purchasing Managers Index (PMI) on Thursday. However, hawkish expectations for the Reserve Bank of Australia's (RBA) policy outlook continued to support the Aussie Dollar and limit the downside of the AUD/USD pair.

In September, seasonally adjusted Australian Retail Sales rose by 0.1% month-over-month, falling short of the expected 0.3% and significantly down from the 0.7% growth seen in the previous month. On a quarterly basis, Retail Sales increased by 0.5% in Q3, rebounding from a 0.3% decline in the prior quarter.

The US Dollar (USD) gains some traction as market caution lingers amid uncertainty surrounding the upcoming US presidential election. The Greenback, however, encountered headwinds as the US Gross Domestic Product (GDP) annualized expanded by 2.8% in Q3, below 3.0% in Q2 and forecasts of 3.0%.

Traders are now focusing on upcoming key US data releases: PCE inflation data on Thursday and Nonfarm Payrolls (NFP) on Friday.

Daily Digest Market Movers: Australian Dollar moves sideways after mixed economic data

The Australian Dollar faced downward pressure after Australia's lower-than-expected third-quarter Consumer Price Index (CPI) data was released on Wednesday. However, mixed economic data from the United States (US) balanced out this effect.
China's NBS Non-Manufacturing PMI rose to 50.2 in October, up from 50.0 in the previous month but slightly below market expectations of 50.4. Meanwhile, the NBS Manufacturing PMI edged up to 50.1 from the prior reading of 49.8, modestly surpassing the forecast of 50.0.
The ADP Employment Change report showed that private businesses in the United States added 233,000 workers in October, marking the largest increase since July 2023. This followed an upward revision to 159,000 in September and significantly exceeded forecasts of 115,000.
The Australian Bureau of Statistics reported that the Consumer Price Index (CPI) rose just 0.2% quarter-over-quarter in the third quarter, down from 1.0% in the previous quarter and slightly below the anticipated 0.3%. The monthly CPI rose by 2.1% year-over-year in September, coming in below market expectations of 2.3% and down from August's reading of 2.7%.
On Tuesday, the US Bureau of Labor Statistics (BLS) reported that JOLTS Job Openings reached 7.443 million in September, down from 7.861 million in August and falling short of the market expectation of 7.99 million.
The Reserve Bank of Australia signaled that the current cash rate of 4.35% is sufficiently restrictive to guide inflation back to the target range of 2%-3% while continuing to support employment. As a result, a rate cut in November appears unlikely.
ANZ-Roy Morgan Australia Consumer Confidence dropped to 86.4 this week, down from 87.5 the previous week.

Technical Analysis: Australian Dollar steadies above 0.6550 close to descending channel’s upper boundary

AUD/USD hovers near 0.6570 on Thursday. The daily chart shows a short-term bearish trend as the pair trades within a descending channel. The 14-day Relative Strength Index (RSI) is trending lower and sits just above the 30 level, reinforcing the bearish sentiment.

On the support side, the AUD/USD may test the lower boundary of the descending channel around 0.6510, followed by the key psychological level of 0.6500.

For resistance, the AUD/USD pair challenges the upper boundary of the descending channel near 0.6580, with another psychological barrier at 0.6600. A breakout above this could open the path toward the nine-day Exponential Moving Average (EMA) at 0.6608.

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 strongest against the Canadian Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.01%	-0.10%	-0.88%	0.07%	-0.05%	-0.08%	-0.26%
EUR	-0.01%		-0.10%	-0.91%	0.07%	-0.05%	-0.09%	-0.25%
GBP	0.10%	0.10%		-0.79%	0.17%	0.05%	0.00%	-0.16%
JPY	0.88%	0.91%	0.79%		0.95%	0.85%	0.75%	0.62%
CAD	-0.07%	-0.07%	-0.17%	-0.95%		-0.11%	-0.17%	-0.34%
AUD	0.05%	0.05%	-0.05%	-0.85%	0.11%		-0.04%	-0.24%
NZD	0.08%	0.09%	-0.01%	-0.75%	0.17%	0.04%		-0.17%
CHF	0.26%	0.25%	0.16%	-0.62%	0.34%	0.24%	0.17%

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).

Economic Indicator

Personal Consumption Expenditures - Price Index (YoY)

The Personal Consumption Expenditures (PCE), released by the US Bureau of Economic Analysis on a monthly basis, measures the changes in the prices of goods and services purchased by consumers in the United States (US). The YoY reading compares prices in the reference month to a year earlier. Price changes may cause consumers to switch from buying one good to another and the PCE Deflator can account for such substitutions. This makes it the preferred measure of inflation for the Federal Reserve. Generally, a high reading is bullish for the US Dollar (USD), while a low reading is bearish.

GBP/USD advances to fresh monthly high above 1.3550

GBP/USD gains traction in the American session and trades at its highest level in a month at around 1.3550 on its way to a positive weekly closing. The US Dollar remains under pressure following the disappointing Retail Sales data and helps the pair push higher.

EUR/USD climbs toward 1.1600 on broad USD weakness

EUR/USD gathers bullish momentum on Friday and trades in positive territory above 1.1550. The US Dollar weakens heading into the weekend as markets continues to scale back bets for a rate hike in September following the disappointing July Retail Sales and UoM Consumer Sentiment data.

Gold bounces from weekly low on softer US Dollar, fading September Fed hike bets

Gold (XAU/USD) rebounds and closes in on $4,400 on Friday after opening the day in negative territory and falling to a fresh weekly low of $4,311, supported by a softer US Dollar (USD) and fading expectations of an imminent Federal Reserve (Fed) interest rate hike. The metal, however, remains below the two-month high of $4,449 touched on Thursday.

Pi Network Price Forecast: PI extends consolidation as bulls eye $0.10

Pi Network (PI) price holds steady on Friday, maintaining a consolidating tone for three consecutive days. Mild retail strength in the PI token remains stable, with Open Interest above $9 million, while social buzz eases. PI token’s technical outlook is mixed, as bearish momentum wanes to neutral, with bulls eyeing the $0.1000 psychological level.

Weekly focus: Some relief in US inflation concerns

Actual inflation data for July came out as expected with a 0.1% m/m increase in headline CPI and 0.2% excluding food and energy. Annual headline inflation remains too high at 3.4% and means that wage earners are experiencing stagnating spending power at best, and core inflation is a bit higher than the inflation target of two percent would suggest.

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