The Australian economy has performed better than expected.

The Australian dollar has weakened due to the decision by the Reserve Bank of Australia (RBA) to maintain the interest rate at 4.1% and pressure from the US dollar. Strong domestic economic data has led investors to anticipate that the Federal Reserve may continue to maintain this high-interest rate.

The Reserve Bank of Australia (RBA) has kept the policy interest rate at 4.1%, marking the fourth consecutive month of unchanged rates. Policymakers have stated that inflation has peaked but remains higher than desired, and further rate hikes may be necessary to bring inflation back to the target range of 2-3% by 2028. This decision will depend on the economic conditions at that time. Stronger-than-expected economic performance in Australia during the first half of 2026 suggests that the economy has been resilient, though below expectations due to the global economic slowdown.

Australia's Manufacturing Purchasing Managers' Index (PMI) increased to 48.7 in September, supported by increased hiring. However, economic weaknesses have led to a rapid decline in new orders both domestically and internationally. Manufacturing output has also slightly decreased, contributing to an overall reduction in confidence.

Retail sales in Australia increased by 0.2% month-on-month (MoM) in August, indicating that consumers continue to exercise caution in their spending due to high-interest rates. Most consumers are cutting back on food expenses the most.

Despite the high-interest rates, the value of new housing loans in Australia increased by 2.6% MoM, totaling AUD 16.07 billion in August. This rise is primarily attributed to the rapid growth in residential construction and purchases of second-hand homes. However, purchases of new residential properties have continued to decline, likely due to high home prices and increased construction costs.

Techical analysis data (5H)

Resistance: 0.9552, 0.9561, 0.9578

Support: 0.9525, 0.9509, 0.9499

Source: Investing.com