The Australian dollar remains moderate while the PBOC leaves the LPR without changes

• The Australian dollar loses land as the Popular Bank of China maintains its LPR one year without changes in 3.00%.
• The AUs also faces the low pressure due to the ongoing commercial tensions between the United States and China.
• The US dollar maintains its position since the robust economic data modeled the expectations of fed features.

The Australian dollar (AUD) loses ground against the US dollar (USD) on Monday, going back their recent earnings from the previous session. The Aud/USD pair remains under the decision of the Popular Bank of China (PBOC) to leave unchanged its preferential loan rates (LPR) to one and five years at 3.00% and 3.50%, respectively. It is important to note that any change in the Chinese economy could impact the Australian dollar, since China and Australia are nearby commercial partners.

The Aud also receives downward pressure due to prevailing commercial tensions between the United States (USA) and China. August 12 will be the deadline for China to finish a long -term tariff agreement with the US, after a preliminary agreement last month to end the increase in rates.

The operators adopt caution before the next publication of the minutes of the meeting of the Bank of the Reserve of Australia (RBA). Economists anticipate that the RBA will begin to relax monetary policy later this year, with the projected cash rate to decrease to approximately 3.1% for the beginning of 2026. This perspective is backed by a balanced labor market and a cautionly optimistic vision of economic growth. The operators will also wait for the speech of the Governor of the RBA, Michele Bullock.

The Australian dollar falls while the US dollar maintains its position due to robust economic data

• The US dollar index (DXY), which measures the value of the US dollar compared to six main currencies, remains around 98.50 at the time of writing.
• The preliminary feeling of the consumer of the University of Michigan (UOM) for July rose to 61.8 from 60.7 in June, exceeding 61.5 expectations. Both current conditions and expectations improved, reflecting a cautious optimism among American homes.
• The Governor of the FOMC, Adriana Kugler, said that the US Central Bank should not lower interest rates “for some time”, since the effects of Trump administration rates are beginning to be reflected in consumer prices. Kugler added that a restrictive monetary policy is essential to maintain aligned inflation psychology.
• The president of the Fed of San Francisco, Mary Daly, said last week that waiting for two rates cuts this year is a “reasonable” perspective, while warning against waiting too much. Daly added that rates will eventually be stabilized by 3% or more, which is higher than the neutral rate prior to pandemic.
• The governor of the Fed, Christopher Waller, said Thursday that he believes that the US Central Bank should reduce its interest rate objective at the July meeting, citing growing economic risks. Waller added that delaying cuts runs the risk of needing a more aggressive action later.
• The US retail sales increased 0.6% month by month in June compared to -0.9% previous. This figure exceeded the market consensus of 0.1%. Meanwhile, annual retail sales rose 3.9%, compared to an increase of 3.3% in May.
• The US Production Price Index. Meanwhile, the underlying IPP increased a 2.6% year -on -year compared to the previous 3.0%, softer than the 2.7% expected.
• The last Beige book of the FED shows that, although the general business activity remains healthy and the inflationary pressures are relatively moderate, the underlying cost pressures are increasing and commercial operators remain cautious.
• President Trump said in an interview with the Royal Network of America’s Voice on Wednesday that he would love that the president of the FED, Jerome Powell, resigned, but that would disturb the markets if the president removed it. He also mentioned the possibility of reaching an agreement with Europe. As for Canada rates, he said it is too early to comment. However, a tariff agreement with India is very close.
• China’s Minister of Commerce, Wang Wentao, said Friday that economic and commercial relations with the United States have gone through storms, but remain important for both. Wentao also said that mutual benefit is the essence of commercial ties between the US and China. The Geneva Agreement and the London framework effectively stabilized commercial ties and cooling tensions, he added.
• China’s economy expanded at an annual 5.2% rate in the second quarter, compared to a growth of 5.4% in the first quarter and the expected growth of 5.1%. Meanwhile, the Chinese Gross Domestic Product rate (GDP) increased 1.1% in the second quarter, against the market consensus of a 0.9% increase. In addition, retail sales increased 4.8% year -on -year in June, compared to 5.6% expected and 6.4% previous, while industrial production stood at 6.8%, compared to 5.6% expected.

The Australian dollar falls towards 0.6500 after retreating nine days

The AUD/USD is negotiating around 0.6510 on Monday. The technical analysis of the daily graphic indicates that a bullish bias is active as the torque is consolidated within the ascending channel pattern. However, the 14 -day relative force index (RSI) is maintained below the 50th mark, which suggests that the bearish bias is strengthening. In addition, the pair is maintained below the nine -day exponential (EMA) mobile average, indicating that the impulse of short -term prices is weaker.

In the lower part, the main support seems to be in the 50 -day EMA of 0.6490. A rupture below this level would decrease the impulse of short -term prices and lead to the Aud/USD torque to aim towards the lower limit of the upward channel around 0.6460, aligned with the minimum of three weeks at 0.6454, which was recorded on July 17.

The Aud/USD torque can try the immediate barrier in the nine -day EMA of 0.6521. A rupture above this level could strengthen the impulse of short -term prices and support the torque to approach to the maximum of eight months of 0.6595, which was reached on July 11.

AUD/USD: Daily graphic