Daily digest market movers: Australian Dollar rises PCE data weights on the USD.

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  • The Australian Dollar appreciated against the US Dollar (USD) due to positive economic news from China and soft economic data from the US.
  • The People's Bank of China (PBOC) implemented stimulus measures, including a rate cut and lower reserve requirement ratio, boosting risk sentiment and supporting the AUD.
  • The RBA reiterated its hawkish stance, implying that the bank will maintain high interest rates until inflation returns to the target range, supporting the AUD.
  • US inflation, as measured by the headline PCE Price Index, increased by 2.2% YoY in August, slightly below expectations and suggesting a modest inflationary environment.
  • The core PCE Price Index, excluding food and energy, rose by 2.7%, in line with expectations and indicating a stable core inflation rate.
  • Markets are betting on high odds of a 50 bps cut by the Fed in the November meeting and monetary policy divergence between the US central bank and the RBA, both supportive of the Aussie.


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