Australian Dollar Gets Support from Hawkish Sentiment
The Australian Dollar (AUD) halted its three-day losing streak on Wednesday (11/27) as the US Dollar (USD) remained subdued amid bond market optimism. Additionally, the Reserve Bank of Australia’s (RBA) hawkish outlook on its upcoming interest rate decision provided support for the AUD. Traders await the US Personal Consumption Expenditures (PCE) Price Index and quarterly Annual Gross Domestic Product due later in the North American session.
Australia’s monthly Consumer Price Index (CPI) rose by 2.1% year-on-year in October, unchanged from the previous month but below market expectations of 2.3%. This marked the lowest inflation rate since July 2021 and remained within the central bank’s target range of 2-3% for the third straight month.
The AUD/USD pair’s gains could be tempered by weaker market sentiment following President-elect Donald Trump’s announcement of a 10% tariff increase on all Chinese goods entering the United States (US). Given that the two countries are close trading partners, any changes in the Chinese economy will have an impact on the Australian market.
The Chinese ambassador to Australia said on Tuesday that “the US policy on trade with China and other countries will have an impact.” The ambassador highlighted China’s hope for dialogue with the US to discuss trade policy and explore ways to effectively manage their bilateral relationship.
Source: FXStreet
