Welcome to Extreme Investor Network, where we provide you with unique insights and analysis on the stock market, trading, and financial news. Today, we are diving into the recent FX Empire report on Aussie Trade Balance and its potential impact on the Australian economy.
The trade terms for Australia have been deteriorating, a result of various factors including lackluster demand from China, the collapse of the real estate market, and the slump in iron ore prices during the first half of 2024. This has led to net trade detracting from GDP growth in Q1 2024, as imports surpassed exports.
One key question on investors’ minds is whether improved diplomatic relations between Australia and China can reignite the Aussie economy. The Reserve Bank of Australia (RBA) is closely monitoring the situation, with recent statements pointing to considerations of China’s economic woes in growth forecasts.
Expert opinions on the potential for an RBA rate hike are varied. While some, like Westpac Chief Economist Luci Ellis, predict a rate cut in November, others, such as Bloomberg TV APAC Chief Markets Editor David Ingles, see a 50-50 chance of a September rate hike due to hotter-than-expected inflation numbers.
Looking ahead, key indicators such as Aussie wage growth, unemployment, consumer confidence, and inflation will play a significant role in shaping the RBA rate path. Additionally, macroeconomic data from China and geopolitical developments could impact the Australian economy.
In the short term, the AUD/USD trends will be influenced by Aussie trade data and the upcoming US Jobs Report. Improving Australian trade terms could support an August RBA rate hike, while a soft US Jobs Report could fuel expectations of a September Fed rate cut, favoring the Aussie dollar.
On the technical side, the AUD/USD is holding above key EMAs on the daily chart, with potential resistance and support levels to watch. Stay informed with our latest updates and insights to make informed decisions and navigate the forex markets effectively.
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