EBC Markets Briefing | Aussie dollar under pressure ahead RBA meeting

The Australian dollar stays at a nearly 2-month low Tuesday as markets doubted that renewed efforts to end the Iran war would get anywhere after Trump rejected Tehran's ceasefire proposal.

Australia's unemployment rate unexpectedly climbed to a five-year high in August, despite a solid rebound in job creation during the same month. That bolsters the case for a rate hike by the RBA later in the day.

The central bank has raised interest rates three ‌times to a post-pandemic high. Bullock has warned that inflation risks are beginning to materialize with oil prices reaching three digits.

Australia faces a rising 50:50 risk of a technical recession driven by aggressive monetary tightening, according to HSBC. Local property market has borne the brunt of shit in the policy.

China's industrial profit growth experienced a further slowdown in August, as the robust performance of its technology manufacturing sector was ultimately eclipsed by chronically weak domestic consumer demand.

The US and China have agreed to slash tariffs on $60 billion worth of goods. The agreement, however, will not significantly impact China's overall exports at a time of heightened geopolitical tensions.

EBC Financial Group analyst says that he Aussie dollar was forming a potential descending triangle variant. Breaching 0.7015 support clears the path for a rapid descent to 0.7000.

Asset Recap

As of market close on 28 September, among EBC major products, Direxion Daily Financial Bear 3X Shares led gains as investors worried about competition from AI and uncertainty ‌around AI-related IPOs.

Qualcomm stock fell sharply following a strong monthly rally and broader technology-sector weakness outweighed recent AI-chip and partnership developments.

Gold prices hit a 7-week low as rising oil prices ‌stoked inflation concerns and bolstered bets on tighter monetary policy, while a higher dollar and Treasury yields created further headwinds.

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EBC Financial Group Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Global Financial Collaboration or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

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