The Australian Dollar weakened against the US Dollar after the People's Bank of China decided to keep its Loan Prime Rates unchanged. Meanwhile, the US Dollar strengthened following positive economic data.
The Australian Dollar (AUD) has retraced its recent gains against the US Dollar (USD) following the People’s Bank of China’s (PBoC) decision to keep its one- and five-year Loan Prime Rates (LPRs) unchanged at 3.10% and 3.60% respectively. Australia's Private Sector Credit grew by 0.5% month-over-month in November, aligning with expectations. This followed a 0.6% increase in October, which marked the fastest monthly growth in four months. On an annual basis, Private Sector Credit rose by 6.
2% in November, the highest growth rate since May 2023, up slightly from 6.1% in October. The Aussie Dollar faces pressure as traders increasingly anticipate that the Reserve Bank of Australia (RBA) may begin cutting its 4.35% cash rate as early as February, amid mounting signs of an economic slowdown. Attention now shifts to the release of the RBA's latest meeting minutes due next week. The US Dollar strengthened after the US Gross Domestic Product (GDP) Annualized reported a 3.1% growth rate in the third quarter, surpassing both market expectations and the previous reading of 2.8%. Additionally, Initial Jobless Claims dropped to 220,000 for the week ending December 13, down from 242,000 in the prior week and below the market forecast of 230,000. Australian Dollar declines due to increased risk aversion following Fed’s hawkish rate cut Australia's 10-year government bond yield trades around 4.52%, mirroring an increase in US bond yields following the Federal Reserve's hawkish stance
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