Ella 
In the Asian market on Thursday, the Australian dollar/US dollar strengthened to around 0.6790. Australian inflation data was better than expected, pushing down expectations of an interest rate cut by the Reserve Bank of Australia (RBA) and providing some support for the Australian dollar.
Data released by the Australian Bureau of Statistics on Thursday showed that Australia’s private capital expenditure recorded -2.2% in the second quarter (Q2), compared with a growth of 1.0% in the previous quarter. This figure is 1.0% lower than the expected value. Meanwhile, spending on buildings and structures recorded -3.8%, while spending on plant and machinery recorded -0.5%.
Australia’s inflation data on Wednesday did not appear to be enough to trigger expectations of a rate cut from the Reserve Bank of Australia, which boosted the Australian dollar against the US dollar. Australia’s monthly inflation rate fell to 3.5% from 3.8% in June, but was above expectations of 3.5%. Investors will get more clues from Australian retail sales due on Friday.
The Federal Reserve signaled that lowering interest rates is finally around the corner, putting overall pressure on the dollar. Federal Reserve Chairman Jerome Powell said in Jackson Hole last week that “the time has come to adjust policy.” Next week’s U.S. non-farm payrolls data for August will be closely watched by the market. Later on Thursday, traders will focus on secondary estimates of U.S. second-quarter gross domestic product, which is expected to grow 2.8%.
