The Australian dollar is currently trading low, around 0.6540. In July, building permits fell by 8.2% from the previous month, which is worse than the expected 4.8% drop and comes after an earlier increase of 11.9%.

China Economic Data

In China, the S&P Global Manufacturing PMI for August hit 50.5, better than the predicted 49.5 and equal to the previous figure of 49.5. The People’s Bank of China set the USD/CNY reference rate at 7.1072, lower than the expected 7.1281. Additionally, a private inflation survey in Australia showed a monthly decrease of 0.3% and a yearly rate of 2.8%. Foreign exchange trading can be risky, leading to potential losses of the initial investment. The recent Australian data paints a mixed picture. Domestic activity appears weak, with business inventories and building permits underperforming. This may prompt the Reserve Bank of Australia to consider easing their policy, especially since the cash rate has stayed steady at 4.85% for the last three meetings. Traders should be wary of the risks for the Australian dollar, which is testing lows near 0.6540. The inflation survey’s year-over-year drop to 2.8%, the lowest since early 2024, suggests a potentially more relaxed stance from the RBA. In light of this, purchasing put options on the AUD/USD may be a wise strategy to protect against a possible further decline in the coming weeks.

Global Economic Outlook

On the other hand, the unexpectedly strong Chinese manufacturing PMI at 50.5 acts as a counterbalance. This marks the fastest growth in five months and boosts the demand for Australian commodities like iron ore, which has recently stabilized above $115 per tonne. This strength from China could support the AUD and create a narrow trading range until new developments arise. Globally, tensions are high, with Asian markets dipping due to renewed uncertainty over US tariffs. The upcoming US jobs data is a crucial event that many are watching, as it will significantly affect the Federal Reserve’s next decisions. After July’s non-farm payrolls report showed a slowdown to 180,000 new jobs, another soft report could strengthen expectations for a rate cut in the fourth quarter. This uncertainty, along with broader security concerns highlighted by the recent Salesforce breach, is shifting some investments toward safe havens. Gold has gained strength as the US dollar weakens ahead of the jobs report. We can expect increased volatility as traders adjust their positions for the Federal Reserve’s next move, which will likely steer market trends in September. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now