The Australian Dollar is showing resilience amidst geopolitical tensions and economic data releases. It is holding gains near a two-week high against the US Dollar, which is pressured by concerns over trade relations between the US and Europe. Upcoming Australian jobs data and inflation figures will be crucial in determining the Reserve Bank of Australia’s (RBA) near-term monetary policy decisions. Market expectations are mixed, with a possible rate hike in February or May.
- The Australian Dollar is trading around $0.673, near a two-week high.
- Rising geopolitical tensions are weighing on the US Dollar.
- Australian jobs data is expected to show a rebound in December employment.
- The unemployment rate is expected to rise slightly to 4.4%.
- Markets price a 30% chance of a 25bp rate hike by the RBA in February, rising to 76% by May.
- Trump’s threats of tariffs on European countries are fueling concerns.
- Australia’s TD-MI Inflation Gauge rose to 3.5% year-over-year (YoY) in December, up from 3.2% previously.
- The IMF has urged the RBA to remain cautious.
- Changes in the Chinese economy could impact the Australian Dollar, as both countries are close trading partners.
Overall, the Australian Dollar’s performance is influenced by a combination of global events and domestic economic indicators. The currency’s near-term direction will likely depend on upcoming jobs data and inflation figures, and how these influence the RBA’s monetary policy decisions. Global trade tensions and economic developments in major trading partners like China also play a significant role in shaping the asset’s value.