AUD/USD: on the eve of the RBA meeting
Having received support from the positive macro statistics published this morning, the Australian dollar is developing an upward dynamics at the beginning of today's European session. At the time of publication of this article, the AUD/USD pair is traded just above the 0.7200 mark, 15 points above the opening price of today's trading day.
According to TD Securities, inflation data reflected an increase in prices in February in Australia by +0.5% (+3.5% in annual terms) against growth in January by +0.4% and +2.8%, respectively. At the same time, retail sales in the country increased by +1.8% in January after a decrease of -4.4% in the previous month, exceeding economists' expectations.
Nevertheless, the statistics presented today will probably not be enough for the RB of Australia to raise the interest rate during tomorrow's meeting. The interest rate is likely to be maintained at the current level of 0.1%, and the current market forecasts do not suggest any changes in the monetary policy of the RBA. The main negative factors for the Australian economy are weak wage growth, a weak labor market and a slowdown in growth, while unemployment in the country has remained high for many years.
Meanwhile, market participants are trying to assess the extent of the sanctions imposed against the Russian Federation by Western countries. It is obvious that the developing economic confrontation is unprecedented. Investors are worried that the sanctions will negatively affect the markets and the global economy.
In these conditions, the demand for protective gold and the dollar will remain high. Since the opening of today's trading day, the futures quotes for the DXY dollar index have been growing again, being near the 97.17 mark at the time of publication of this article. Last Friday, the DXY US dollar index reached the highs of the year at 97.73, but by the end of the session in the US it fell to the level of 96.60.
According to data published on Friday, the price index of personal consumption expenditures (PCE) in the United States rose by 0.6% in January. PCE growth in January was 6.1% compared to the same period last year. Personal spending in the US rose 2.1% in January, while economists had expected it to grow by 1.6%. Orders for durable goods in the United States increased by 1.6% in January, with a growth forecast of 0.8%. The data suggest that increased inflationary pressure on the American economy remains. High inflation will speak in favor of the Fed's plan to raise interest rates several times this year. And it will also create prerequisites for further strengthening of the dollar.
There are no important macro statistics planned in the economic calendar today. However, market participants are preparing for further volatility, as the situation around Ukraine is far from resolved.