The Reserve Bank of Australia will release its meeting minutes on Tuesday. It holds the potential to impact the AUD/USD pair positively. It was last seen dancing around 0.6700, the highest since July this year, indicating a potential AUD/USD rebound. One crucial factor supporting the pair is the RBA December meeting minutes and the US Federal Reserve deciding to cut rates in their next meeting or as early as possible.
Anticipation is that rates could begin coming down in the third quarter of 2024, provided inflation plays along with everyone’s expectations. Another analysis is that March 2024 would be an ideal time to start cutting rates. So far, the Fed has downplayed aggressively cutting rates in the next year. Authorities will, however, warn the community not to take extreme measures amid unofficial speculations regarding the RBA meeting minutes.
Nevertheless, a call by the Fed will heavily weigh on the performance of the AUD/USD. The pair has gained 0.38% for 0.6725. It was pretty stagnant from December 15, 2023, to December 17, 2023, at 0.6698.
Australia’s conditions depend on how well the Chinese authorities respond to their internal circumstances. This is based on the fact that China is Australia’s largest trading partner. Stopping them from gaining traction is the property market in China. The government has demonstrated its intention to offer more moral and economic support so that the industry picks up the pace. The lending rate is likely to be cut in half, effective in the first six months of 2024.
The objective is to bring back demand for real estate to boost the moderate overall economic growth that was achieved in the previous month.
That said, the US Fed is taking a sigh of relief after witnessing a growth in business activity. Per the US S&P Global Purchasing Managers’ Index, published on Friday, there is a rise in composite PMI and service PMI. They have gone up to 51.0 and 51.3, respectively, from 50.7 and 50.8 in the same order. Only manufacturing PMI has a dip from 49.4 to 48.2. Australian forex brokers hope all factors align, fueling the pair with some strength. Also, the American authorities are expected to roll out information pertaining to US housing data.
Interestingly, the US housing data is sufficient to hold back the performance of the US dollar index. It lost ground below 102.60 and is now moving at 102.38. Credit for the movement lies with the dovish remarks that the Federal Reserve made, triggering a rally in US equities.
That inculcates details about Building Permits and Housing Starts. The Core Personal Consumption Expenditure Price Index (PCE) is due this Friday. That will either add flames to the fire or help calm the situation. AUD/USD is trending with a Daily SMA100 of 0.6461 and a last price of 0.6698.