AUDUSD Analysis 19-July-2024

The Australian dollar dropped to about $0.669 (AUD/USD pair), hitting its lowest point in over two weeks. The US dollar gained strength due to upbeat US economic data, causing the Aussie dollar to decline. This decline mirrored a downturn in other risky assets, including US stocks and commodities like copper and oil, which saw significant selling.

AUDUSD Analysis 19-July-2024

In June, the job market in Australia showed unexpected growth, indicating tight labor conditions. This has raised concerns about a possible interest rate increase by the Reserve Bank of Australia (RBA). Despite the job growth, the unemployment rate increased to 4.1% from 4%. Because of this, market expectations for an interest rate hike by the RBA in August have risen to 20%, compared to 12% earlier in the week.

Additionally, the RBA is expected to be slower to ease monetary policy than other major central banks. Meanwhile, the Australian dollar is set to strengthen against the New Zealand dollar for the fifth week due to differing monetary policy expectations between the two countries.