FxNews – The Australian dollar recently climbed above $0.67, reaching its highest point since July. This rise was largely due to the US dollar’s sharp decline, following the Federal Reserve’s announcement of three anticipated rate cuts next year. According to the Federal Open Market Committee (FOMC) “dot plot,” the expected funds rate by the end of the next year is now 4.6%, significantly lower than the previous 5.1% forecast.
Meanwhile, the Reserve Bank of Australia’s Governor, Bullock, has adopted a cautious stance. Earlier this week, he stated that the central bank would continue monitoring incoming data, affirming Australia’s steady progress in managing global inflation. However, market analysts speculate that the Reserve Bank of Australia might halt its monetary tightening, given the weakening economic fundamentals. They anticipate a slower decrease in inflation back to target levels compared to other major economies.
In 2023, Australian consumer sentiment recorded its second-worst year, impacted by rising living costs and high interest rates. Additionally, business sentiment fell in November, reflecting a gloomier outlook across various industries.