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How is the Australian dollar doing today?

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How is the Australian dollar doing today? The Australian dollar, thanks to its counterpart from the U.S., rose. However, the trend of weakening will continue, experts believe.

The Australian dollar and the yield on the issuing country’s government bonds fell after the consumer price index came in slightly below expectations. The rate of Australia’s national currency is under the strong influence of the U.S. dollar and the negative impact of a weakened coronavirus in China – the main economic neighbor of the island-mainland.

However, analysts at the Australia and New Zealand Banking Group (ANZ) said in their latest research report that Australia’s second-quarter inflation data does not change their view on the Reserve Bank of Australia (RBA) raising its rate by 50 bps in August.

Where is the Australian dollar going: some dollars are crying too

The Australian dollar has suffered markedly this year due to a slowdown in business activity. Businesses and companies have managed to save jobs, but otherwise the situation looks difficult. This is due to the spring Chinese lockdown – China, despite all the controversy, remains a key trade and economic partner of Australia – and the global recession. 

Why is the australian dollar so bad? The Reserve Bank of Australia is following the global trend to raise rates, protects the financial system and generally looks progressive compared to global central banks. The risks include export declines, high energy prices, and U.S. dollar pressure. 

Regarding technical analysis on the daily chart, the AUD/USD reached the corrective growth target of 0.7000 and can go down to 0.6900 to cool down. Mid-term the tool remains under pressure and can return to 0.6675, if the external background worsens and the pressure on the American currency increases. 

The participants of the currency market call the Australian dollar a “kangaroo”. Only on July 27, the currency strongly “jumped” against the American dollar from 0.6900 to above 0.7000 – by almost 1.5%. It is still at that level in the morning of Thursday. 

The main reason is the U.S. dollar. It dropped from 107.3 points to 106 points on the USDX index against the major currencies. This is a reaction to the outcome of the main event of the month for the markets – the US Federal Reserve meeting on Wednesday. The regulator predictably raised its interest rate from 1.75% to 2.5%. The increase to such a level was the most probable and was put in prices in advance. 

Therefore, a coincidence with expectations led not to growth, but to a weakening of the dollar. The assumption of the relative caution of the Fed, which will not raise the rate to the discussed 2.75%, already from mid-July, weakened the dollar. The AUD/USD has been rising since July 14 from 0.6680. 

Will its growth stop? During the day on Thursday the currency may be affected by important new statistics – the data on U.S. GDP for the second quarter. It is assumed that it has risen by 0.5% after a decrease of 1.6% in the previous period. Data better or worse than that forecast will weaken or strengthen the “kangaroo” along with other currencies, respectively. During the day the most probable range of AUD/USD movement is 0.6960 – 0.7020. 

The Producer Price Index data may have a certain influence on the AUD on Friday. The indicator may be perceived positively for the quotation of this currency.

The U.S. dollar has higher chances of strengthening in the medium term until the end of the year. After all, the Fed has declared a further increase in interest rates and the sale of previously purchased bonds. The strengthening of AUD/USD in recent weeks is just a correction to the main downtrend, which was formed in February 2021. Its continuation may lead the pair to levels of 0.6500-0.6600 at the end of the year. Against this background, we can also analyze how the australian dollar is doing about inflation. 

Forex

Forex News today: Markets get restless ahead of weekend

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News forex today: The rally in risky assets, fueled by weak US inflation data in the middle of the week, has waned and market dynamics have become volatile ahead of the weekend. The US dollar index is moving in a narrow channel above the 105.00 level; the 10-year US bond yield is holding above 2.8% and the US stock index futures are making a small intraday gain after Thursday’s mixed Wall Street dynamics. 

Forex news daily: what is going on in the currency market?

EUR/USD registered a small intraday gain on Thursday and appears to have moved to secure just above the 1.0300 mark on Friday.

GBP/USD continues to oscillate in a narrow channel near 1.2200 in the early European morning as investors evaluate the latest released data. The U.K. The Office for National Statistics reported Friday that the country’s gross domestic product fell 0.1% quarter-over-quarter in the second quarter. Also, industrial production and manufacturing output fell 0.9% and 1.6% month-over-month in July, respectively.

Gold closed flat Thursday and remains under pressure near $1,790 early Friday, while U.S. Treasury yields remain resilient during the European session.

The USD\/JPY pair rebounded after falling below 132.00 on Thursday, but it didn’t gain momentum. The pair is now clinging to modest intraday gains, trying to climb to 133.50.

Rising crude oil prices are supporting the commodity-sensitive Loonie and the USD/CAD pair continues to decline to 1.2700 on Friday. A barrel of West Texas Intermediate crude is up more than 6% this week.

Earlier we reported that the dollar is falling faster than expected after the inflation data.

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Forex

Is the American dollar going down? The dollar is going down faster than expected after inflation data

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Why is the dollar going down against the euro

Is the American dollar going down? The dollar accelerated its fall against major currencies Thursday as traders lowered bets on an aggressive Fed borrowing cost increase following softer-than-expected U.S. inflation data a day earlier.

The dollar index to a basket of six major currencies, DXY fell 0.19% to 104.993. A day earlier, the greenback recorded its biggest daily drop of 1% over the previous day.

Why is the dollar going down against the euro? The dollar fell after the release of the US inflation data, with consumer prices unchanged in July compared to a 1.3% month-on-month increase in June. The July statistics came in lower than expected due to a sharp drop in gasoline prices, leading markets to believe again that the inflation ceiling is near.

The Fed is still “very, very far from declaring victory” over inflation, Minneapolis Fed Chairman Neel Kashkari said after the CPI release. He said the need to raise the Fed’s key rate to 3.9 percent by the end of this year and to 4.4 percent by the end of 2023 has not changed since the data release.

“Yesterday’s statistics clearly signaled a reduced likelihood of a further aggressive move by the Fed (+75 basis points) and hence helps reduce demand for the dollar, but equally, we believe that this data alone is not enough for a subsequent sell-off in the currency,” MUFG currency analysts said.

Earlier we reported that FX rate EUR/USD depends on US CPI.

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Forex

FX rate EUR/USD: Everything depends on US CPI

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forex eur usd live chart

FX rates EUR/USD have been unable to make a decisive move since the beginning of the week; market participants are taking a wait-and-see attitude ahead of the release of key US inflation data. According to FXStreet analyst Ehren Senzeger, the technical outlook suggests the pair could move in either direction.

“Although Reuters reported earlier in the day that eurozone money markets are now fully priced in a 50 basis point (bps) European Central Bank (ECB) rate hike in September, the single currency is struggling to attract buyers. German Finance Minister Christian Lindner said earlier in the day that Germany’s economic outlook looks fragile.

In the afternoon, the U.S. Bureau of Labor Statistics will release consumer price index (CPI) data for July. Annual inflation is expected to fall to 8.7% from 9.1% in June, while the core CPI, which considers volatile food and energy prices, will rise to 6.1% from 5.9%.

The forex eur usd live chart reaction to the inflation data should be fairly straightforward: a strong core CPI will cause the dollar to rally, while a weak one will dampen interest in the dollar. According to the CME Group FedWatch Tool, markets estimate a 66.5% chance that the Fed will decide to raise rates by 75 bps in September, suggesting that there is room for a significant US dollar index reaction if the data diverges from market consensus.”

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