Australian Dollar Stays Weak Even After Strong China Data – RBA Rate Cut in Focus
The Australian Dollar (AUD) stayed weak on Tuesday, even though China reported strong economic numbers. The AUD/USD pair dropped to around 0.6470, falling for the second day in a row.
China’s services sector grew faster than expected in July. The Caixin Services PMI rose to 52.6, showing strong demand in the world’s second-largest economy. Usually, good news from China helps the Aussie Dollar because the two countries trade a lot. But this time, the AUD didn’t gain much.
Australia also had good news. Its own services PMI jumped to 54.1, the highest level since March 2024. The overall Composite PMI stayed above 50, which means the economy is still growing. But even with these positive updates, the Aussie Dollar stayed down.
One reason is the strong US Dollar (USD). Many traders are waiting for updates from the Federal Reserve (Fed) about possible interest rate cuts. At the same time, the Reserve Bank of Australia (RBA) is expected to cut interest rates by 25 basis points next week, which may lower the rate to 3.60%. This is because inflation is slowing, and unemployment is rising in Australia.
Impact:
AUD/USD might fall more if the RBA cuts rates. A strong USD and market caution could keep the Aussie Dollar under pressure.
