AUD Resilient, Big Signals from China & the RBA?
The Australian dollar (AUD) moved steadily against the US dollar (USD) on Thursday following the People's Bank of China (PBOC) interest rate decision. The Chinese central bank held the Loan Prime Rate (LPR) at 3.00% for one-year and 3.50% for five-year terms. As China is Australia's main trading partner, this decision influenced market perceptions of Australia's economic outlook and the movement of the AUD.
Domestically, comments from RBA Assistant Governor Sarah Hunter added some color to the market. She emphasized that excessively strong economic growth has the potential to trigger inflationary pressures and cautioned that monthly inflation data can be highly volatile and should not be used as a basis for a swift reaction. The RBA stated that it is closely monitoring labor market conditions to assess supply capacity and evaluate how monetary policy transmission changes over time.
In terms of price, the AUD/USD managed to rebound after a correction of more than 0.5% in the previous session. Improved global risk sentiment, driven by Nvidia's revenue surge, which revived interest in technology and AI stocks, also supported riskier currencies like the AUD. At the same time, expectations that the RBA will be cautious and not rush to cut interest rates provide additional support. The minutes of the November meeting suggested the RBA could keep interest rates high for longer if economic data remains solid.
Australian domestic data so far also supports this view. Steady third-quarter wage growth, still-strong employment figures, and persistently high inflation reinforce the impression that the monetary easing cycle may have ended temporarily. The ASX 30-Day Interbank Cash Rate Futures contract as of November 18 reflected only about an 8% chance of a rate cut to 3.35% from 3.60% at the next RBA meeting. This means the market still sees the AUD as supported by relatively attractive interest rates amid global uncertainty. (az)
Source: Newsmaker.id
