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Powell cut interest rates in September vs. the RBA "stand still", with a long and short life-and-death line of 0.65%!
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Market Review]: Powell cut interest rates in September vs. the RBA "stand still", 0.65% of the long and short life-and-death line!". Hope it will be helpful to you! The original content is as follows:
On Monday (August 18), the Australian dollar continued its rise for the second consecutive trading day, trading around 0.6515, up 0.17% from the closing price of the New York foreign exchange market on the previous trading day of 0.6504. The highest intraday hit 0.6521 and the lowest fell 0.6506, maintaining a narrow range of fluctuations overall. The Australian dollar may face pressure as the Australian dollar remains upward due to widespread expectations that the Fed will turn to dovish policy in September.
The optimistic Australian employment data in July eased market concerns about weak labor markets and reduced the urgency of the RBA's interest rate cuts again in September, which also provided support for the Australian dollar.
RBA Chairman Michel Brock said last week that current forecasts suggest a possible cut in cash rates may be needed to ensure price stability. However, Brock stressed that the board will adopt a "sequence-by-meet decision-making" approach and avoid any xmtraders.commitment to interest rate changes when financial markets fluctuate.
As the Fed's outlook is moderate, the dollar remains stable, and the Australian dollar strengthens
The dollar index (DXY) is a measure of the value of the dollar against six major currencies. It remained stable after the decline in the previous trading day, at around 97.95. The dollar may weaken further as recent U.S. economic data strengthens expectations of the Fed's interest rate cut in September.
The Trump administration has expanded 50% tariffs on steel and aluminum imports and will take effect on August 18. Friday's notice included 407 new product codes in the U.S. coordinated tariff sheet. U.S. President Trump also told reporters that he intends to issue further announcements on steel tariffs and new taxes on semiconductor imports.
SpecialTrump said last Saturday that Ukraine should seek a deal to end the war with Russia and believed that "Russia is a very powerful power, and they are not." His remarks xmtraders.come after a recent summit in Alaska reported that Russian President Vladimir Putin demanded an increase in Ukrainian territory.
The initial value of Michigan Consumer Confidence Index in August fell to 58.6 from 61.7 in July, down from 62.0 in July. Meanwhile, the monthly rate of retail sales in the United States rose 0.5% as expected, lower than the increase of 0.9% in June (revised). The monthly rate of the retail sales control group rose by 0.5%, while the previous value was an increase of 0.8%.
U.S. Treasury Secretary Scott Becent said in an interview last Wednesday that the short-term Fed interest rate should be 1.5-1.75 percentage points lower than the current effective benchmark interest rate of 4.33%. Becente added that the Fed has a high probability of choosing to cut interest rates by 50 basis points in September.
U.S. President Trump shared his "paper calculation" that the Fed interest rate should reach or be close to 1%. Trump also pointed out that interest rates should be lowered by three to four percentage points. He added that interest rates are just calculations on paper.
U.S. Treasury Secretary Bescent said last Wednesday that Chinese and U.S. trade officials will meet again in the next two to three months to discuss the future of the economic relations between the two countries.
China's retail sales in July rose 3.7% year-on-year, lower than expected 4.6% and 4.8% in June. Meanwhile, industrial production rose 5.7% year-on-year, up from previous forecasts of 5.9% and 6.8%.
Australia's employment changes ranged from 1K in June (corrected from 2K) to 24.5K in July, rather than the generally predicted 25K. Meanwhile, the unemployment rate fell to 4.2% as expected from 4.3% in June.
As widely expected, the RBA cut interest rates by 25 basis points last Tuesday, reducing the official cash rate (OCR) to 3.6% from 3.85% at the August policy meeting.
The Australian dollar rebounded to the upward channel after breaking through the 9-day moving average
The Australian dollar traded around 0.6515 against the US dollar. Technical analysis of the daily chart shows that the exchange rate is expected to launch a bullish repair market - it has rebounded and is trying to return to the upward channel pattern. The exchange rate breaks through the 9-day index moving average (EMA) and indicates that the short-term momentum is increasing, while the 14-day relative strength index (RSI) remains stable at the 50 neutral level, indicating that the subsequent trend will provide clear direction guidance.
If the upward channel is successfully returned, it will strengthen bullish expectations and push the exchange rate to hit the monthly high of 0.6568 on August 14. After breaking through this position, it may further challenge the upper track of the channel near 0.6610, and then aim for the nine-month high of 0.6625 set on July 24.
In the downward trend, 9-day EMA (0.6511) forms initial support, and 50-day EMA (0.6501) and psychological threshold 0.6500 formKey support belt. If it falls below this area, it will weaken the medium- and short-term price momentum, and the exchange rate may fall to the two-month low of 0.6419 on August 1.
The above content is about "[XM Foreign Exchange Market Review]: Powell's interest rate cut in September vs. the RBA "stand still", 0.65% of long and short life and death line!", which was carefully xmtraders.compiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!
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