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by On Thursday, the Australian dollar dropped to approximately $0.683, moving away from its 19-month peak as the US dollar gained strength following unexpected positive private employment data in the US. This data lessened expectations of a lenient approach to the Federal Reserve’s monetary policy.
The 4-hour chart below demonstrates the AUD/USD conversion rate.
AUDUSD Fundamental Analysis – 3-October-2024
Moreover, rising conflicts in the Middle East, particularly after Iran’s missile strike on Israel, continued to unsettle markets and reduce interest in riskier investments.
Despite these factors, the Australian dollar is still buoyed by predictions that the Reserve Bank of Australia (RBA) will delay interest rate cuts longer than other central banks.
The RBA is 72% likely to reduce rates in December, though if inflation remains elevated, it might maintain its current policy until early 2025. Additionally, recent data indicates that business activity in Australia contracted in September, as poor manufacturing performance overshadowed growth in the services sector.
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