AUD Ends Winning Streak Amid RBA Policy Focus

The Australian Dollar (AUD) put anAUD Ends Winning Streak Amid RBA Policy Focus

BOJ Debates Exiting Easy Policy, 10-Year JGBs Weaken

Nikkei Rises in Asian Trade; China, India on Holiday

 end to its recent winning streak on Monday, marking the third consecutive day of losses. The AUD/USD pair had received support earlier, primarily driven by positive Chinese PMI data released over the weekend. However, the US Dollar (USD) showed resilience following moderate economic data released on the previous Friday.

Australia’s TD Securities Inflation data for September indicated a decrease in inflation compared to August. The Reserve Bank of Australia (RBA) is anticipated to maintain the current interest rate in the upcoming policy meeting on Tuesday. However, the Consumer Price Index (CPI) in Australia for the same month displayed an improvement compared to July, primarily due to rising energy prices. This increase in inflation could potentially influence the RBA’s policy decision.

The US Dollar Index (DXY) continued to strengthen in the second trading session after the release of moderate economic data from the United States (US). Core Personal Consumption Expenditures (PCE) Price Index for August met expectations but was lower than July’s figures. US Core PCE MoM data fell below market consensus, while the Michigan Consumer Sentiment Index for September showed improvement compared to previous figures.

The strength of the USD was also bolstered by the positive performance of US Treasury yields, with the yield on the 10-year US Treasury note remaining near record highs.

Here are the key points summarized:

– AUD/USD traded lower, retreating from recent gains and facing challenges due to market caution regarding the US Federal Reserve’s interest rate trajectory.

– The RBA is expected to maintain the current interest rate of 4.1% in the upcoming policy meeting.

– Australia’s TD Securities Inflation (YoY) for September was 5.7%, lower than August’s 6.1%. Meanwhile, Australia’s Monthly Consumer Price Index (CPI) YoY for August rose to 5.2%, as expected, up from the previous rate of 4.9%.

– Positive data from China’s Manufacturing PMI and Non-Manufacturing PMI added to market dynamics.

– Upbeat US Treasury Yields supported the strength of the USD.

– US Core PCE Price Index (YoY) for August was 3.9%, as estimated, down from the previous 4.3%, while Core PCE MoM showed a soft reading of 0.1%.

– The US successfully passed bills to avert a government shutdown, prompting the US Dollar Index (USD) to resume its upward trajectory.

– Federal Reserve officials expressed confidence in managing inflation and sustaining economic growth.

– Traders awaited US ISM Manufacturing PMI for September and Fed Chair Jerome Powell’s speech on Monday, with the RBA interest rate decision on Tuesday being closely watched.