Recent reports have shown that China’s new property sales have remained weak, which is also affecting steel demand and production. This is a concerning trend that can have ripple effects on the global economy. Judo Bank Chief Economic Advisor, Warren Hogan, expressed his concerns regarding the August PMI Survey and the RBA rate path, suggesting that the RBA may need to raise the cash rate further before any easing cycle can begin.
Investors are closely monitoring consumer confidence and house price trends, as they can have a significant impact on the economy. Consumer confidence plays a crucial role in shaping the Fed rate path, with economists predicting a modest decline in the CB Consumer Confidence Index from 100.3 in July to 100.1 in August. A sharp drop in consumer confidence could signal reduced consumer spending, which accounts for over 70% of the GDP.
Arch Capital Chief Global Economist, Parker Ross, highlighted the importance of the US labor market in determining the Fed rate path. Ross emphasized that the Fed has never initiated a mid-cycle adjustment with an increasing unemployment rate year over year. He cautioned that there may be too many rate cuts priced in, suggesting a cautious approach to monetary policy.
The near-term trends of the AUD/USD pair will be influenced by economic indicators from China and Australian inflation figures. Weak data could slow down the push towards $0.70, while a dovish Fed rate path could support a return to that level. Investors need to stay informed about real-time data, news updates, and expert commentary to adjust their trading strategies accordingly.
The AUD/USD pair is currently trading above the 50-day and 200-day EMAs, indicating a bullish trend. A breakout above the $0.67967 resistance level could pave the way for a move towards $0.68500. Conversely, a drop below $0.67500 could signal a potential decline towards the $0.67003 support level. Investors should pay close attention to buying pressure at key technical levels to gauge market sentiment.
The economic indicators discussed in this article play a crucial role in shaping currency trends, particularly in the case of the AUD/USD pair. Investors and traders need to stay informed about the latest developments in China, the US labor market, consumer confidence, and central bank policies to make well-informed trading decisions in the forex markets.