• The Australian Dollar appreciates following the PBoC’s rate cuts on Monday.
• The PBoC has reduced the 1- and 5-year Loan Prime Rate to 3.10% and 3.6%, respectively.
• The Aussie Dollar appreciated as domestic upbeat labor data has lowered the odds of the RBA’s rate cut this year.

The Australian Dollar (AUD) extended its winning streak against the US Dollar (USD) for the third consecutive session on Monday. The upside of the Aussie Dollar could be attributed to the rate cuts in China, its largest trading partner.

The People's Bank of China (PBoC) reduced the 1-year Loan Prime Rate (LPR) to 3.10% from 3.35% and the 5-year LPR to 3.6% from 3.85%, in line with expectations. Lower interest rates are anticipated to stimulate China's domestic economic activity, potentially increasing demand for Australian exports.

Australia’s upbeat employment data, released last week, has reduced the likelihood of the Reserve Bank of Australia (RBA) implementing an interest rate cut this year. This outlook has bolstered the AUD, providing continued support to the AUD/USD pair.

RBA Deputy Governor Andrew Hauser addressed the CBA 2024 Global Markets Conference in Sydney on Monday, expressing slight surprise at the strength of employment growth. Hauser noted that the labor participation rate is remarkably high and emphasized that while the RBA is data-dependent, it is not data-obsessed.