Dovish tone from RBA pressures Aussie while US data remains in focus
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The Australian Dollar remains under significant selling pressure after the Reserve Bank of Australia (RBA) left its Official Cash Rate (OCR) unchanged at 4.35%, following its December policy meeting. RBA Governor Michele Bullock highlighted that while inflation risks have eased, they have not disappeared, creating a cautious market environment for the AUD. Early Tuesday, AUD/USD was trading near 0.6400, down over 0.5% on the day, reflecting the market’s reaction to the central bank’s dovish stance.
China’s trade data offered mixed signals, with the trade surplus widening to $97.44 billion in November. Exports increased by 6.7% year-on-year, while imports fell by 3.9%. Chinese President Xi Jinping expressed confidence in meeting this year’s economic targets, yet the Australian Dollar failed to capitalize on the news, as broader market sentiment remained risk-averse.
The US Dollar held steady early Tuesday, supported by cautious sentiment ahead of significant US economic data releases. The third-quarter Unit Labor Costs and Nonfarm Productivity data, set to be released later in the day, are expected to influence market direction. The USD Index is consolidating slightly above 106.00, with 10-year Treasury yields hovering below 4.2%.
EUR/USD trades near 1.0550 after minimal movement on Monday, as German inflation data confirmed an annual rise of 2.2% in November. Meanwhile, GBP/USD remains range-bound around 1.2750 after failing to break higher on Monday. USD/JPY gained 0.8% in the previous session and stabilizes above 151.00, reflecting broader USD strength.
Gold prices advanced on Monday, driven by hopes of additional Chinese stimulus measures. XAU/USD extended gains early Tuesday, trading close to $2,670, with market participants keeping a close watch on further developments.
Looking ahead, the market will monitor US data releases for potential catalysts, especially with the Federal Reserve's December policy meeting approaching. The Australian Dollar remains vulnerable as traders digest the RBA's cautious tone and look for further clarity on the global economic outlook. For AUD/USD, immediate resistance stands at 0.6450, while the psychological level of 0.6400 acts as a crucial support, with any break potentially opening the way to further declines.
China’s trade data offered mixed signals, with the trade surplus widening to $97.44 billion in November. Exports increased by 6.7% year-on-year, while imports fell by 3.9%. Chinese President Xi Jinping expressed confidence in meeting this year’s economic targets, yet the Australian Dollar failed to capitalize on the news, as broader market sentiment remained risk-averse.
The US Dollar held steady early Tuesday, supported by cautious sentiment ahead of significant US economic data releases. The third-quarter Unit Labor Costs and Nonfarm Productivity data, set to be released later in the day, are expected to influence market direction. The USD Index is consolidating slightly above 106.00, with 10-year Treasury yields hovering below 4.2%.
EUR/USD trades near 1.0550 after minimal movement on Monday, as German inflation data confirmed an annual rise of 2.2% in November. Meanwhile, GBP/USD remains range-bound around 1.2750 after failing to break higher on Monday. USD/JPY gained 0.8% in the previous session and stabilizes above 151.00, reflecting broader USD strength.
Gold prices advanced on Monday, driven by hopes of additional Chinese stimulus measures. XAU/USD extended gains early Tuesday, trading close to $2,670, with market participants keeping a close watch on further developments.
Looking ahead, the market will monitor US data releases for potential catalysts, especially with the Federal Reserve's December policy meeting approaching. The Australian Dollar remains vulnerable as traders digest the RBA's cautious tone and look for further clarity on the global economic outlook. For AUD/USD, immediate resistance stands at 0.6450, while the psychological level of 0.6400 acts as a crucial support, with any break potentially opening the way to further declines.