The Australian dollar declined despite positive consumer confidence data as broader USD strength dominated market focus.
AUD/USD slipped below its 50-day exponential moving average, a key support level since April, as sellers prioritized broader US dollar strength over domestic signals. The Reserve Bank of Australia’s latest meeting minutes had minimal impact on pricing, while Westpac’s Consumer Confidence index rebounded 3.5% in May following April’s 12.5% drop.
Market attention shifts to Wednesday’s People’s Bank of China rate decision, with consensus expecting the one-year Loan Prime Rate to remain at 3%. Any easing could pressure the Chinese yuan and drag AUD/USD lower. Local PMI data, previously just above expansion levels, will also be released.
Thursday’s Australian employment report is the next major catalyst, with forecasts for 17.5K jobs added and unemployment steady at 4.3%. A miss could fuel RBA dovish arguments ahead of the next policy decision.