The Australian economy continues to slow down.

The Australian dollar has strengthened by about 1.49 Australian dollars per US dollar due to the rapid depreciation of the US dollar. This occurred after the Federal Reserve indicated three interest rate cuts in the coming year, totaling 75 basis points, with each cut being 25 basis points.

According to Michelle Bullock, the Deputy Governor of the Reserve Bank of Australia, the central bank is considering future directions and monitoring other economic data to be announced. She emphasized that the Reserve Bank of Australia continues to seek ways to consistently mitigate inflationary pressures. This is observed as fundamental economic indicators weaken. However, it is anticipated that the inflation rate will decrease more slowly compared to other countries.

The manufacturing Purchasing Managers' Index (PMI) rose to 47.8, marking the tenth consecutive month of contraction in the manufacturing sector. Production and new orders continued to decline due to the slowing economy and pressure from higher interest rates. This led to a continuous reduction in manufacturing jobs for the second consecutive month. Companies have also reduced inventory levels both domestically and internationally, resulting in increased price pressures from higher production costs due to increased raw material and energy prices passed on to customers.

The unemployment rate increased to 3.9% in November from 3.8% in the previous month. The number of unemployed people rose by 18,800 to 572,000, with full-time job seekers increasing by 10,600 to 383,600. Meanwhile, employment increased by 61,500 to 14.26 million, surpassing market expectations of an 11,000 increase.

The Business Confidence Index in Australia decreased to -9 in November, reaching its lowest level since 2012 due to reduced confidence in most industries. This is attributed to increased production costs, reduced sales, and decreased profits. It is anticipated that the domestic economy will further slow down in the upcoming year.

The forecast predicts a 4.5% decrease in the inflation rate in December after the Reserve Bank of Australia maintained the interest rate at 4.35%. It is suggested that the lower inflation rate is due to excessive domestic supply, with minimal impact from foreign imports. The domestic inflation rate was at 5.4% in the third quarter, but the annual rate decreased to 4.9%, still higher than the target range of 2-3%.

The Australian 10-year government bond yield dropped below 4.1%, reaching a three-month low. This decrease is in line with the significant reduction in the yield of US government bonds following the Federal Reserve's decision to maintain interest rates and signal three rate cuts in the coming year. The economic indicators in Australia remain in a phase of slowdown.

Techical analysis data (5H)

Resistance: 1.4891, 1.4915, 1.4937

Support: 1.4844, 1.4823, 1.4798

Source: Investing.com