Aussie dollar gains on strong data, China stimulus hopes

The Australian dollar rose above $0.622 on Monday, extending recent gains as strong services activity data and expectations of more economic stimulus in China improved the outlook for Australia’s largest trading partner.

Aussie dollar gains on strong data, China stimulus hopes

This week, a slight dip in the US dollar ahead of key labor market data also supported the Aussie. Domestically, investors absorbed revised higher composite and services PMIs for December. Looking ahead, markets are focused on Wednesday’s monthly inflation report, expecting inflation to accelerate in November. The Reserve Bank of Australia has become increasingly dovish on the monetary policy front due to rising economic concerns.

Markets expect RBA rate cut in April, possibly in February

Market expectations now point to a potential quarter-point rate cut in April, with some speculating that a move could come as early as February.