AUDUSD is declining in response to disappointing statistics.
The Australian Dollar stopped rising against the USD on Tuesday; right now, the Aussie is retreating. The current quote for the instrument is 0.7102.
The preliminary statistics published in the morning showed that the Manufacturing PMI in Australia dropped to 55.3 points in May after being 68.8 points the month before. The Services PMI fell to 53.0 points against 56.1 points in April.
The indicators are probably declining due to the Chinese economic slump – China is Australia’s key trade and economic partner. Another factor that might have influenced both PMIs is the change of seasons.
The RBA’s stance remains “hawkish”. However, with the allowance for the global economic slowdown and several domestic risk factors, the regulator’s strategy might disappoint investors and capital markets. For the Aussie to rise, there should be, among other things, an appropriate risk attitude. But the lack of positive catalysts may eliminate the country’s relative economic stability and it may result in a new wave of decline in the AUD rate.
The RBA’s benchmark interest rate might significantly rise until the end of 2022. Average market expectations imply that the regulator will introduce 25-point rate hikes during its meetings in June, July, and August. Another hike might happen in November. By the end of the year, the rate might reach 1.25 1.35%.
The RBA’s next meeting is scheduled for 7 June.