- AUD/USD oscillates in a narrow range, nearing fresh monthly highs in early Tuesday.
- Market players have priced in a 100 basis point (bps) rate cut in the first half of 2024.
- More optimistic about additional Chinese stimulus measures and an end of the Fed's rate hike cycle lift the AUD.
- The RBA and FOMC Meeting Minutes will be in the spotlight on Tuesday.
The AUD/USD pair consolidates its recent gains to nearly fresh monthly highs during the early Asian session on Tuesday. The risk appetite and lower US Treasury yields exert some selling pressure on the US Dollar (USD), which lends support to the AUD/USD. Meanwhile, the US Dollar Index (DXY) dropped to 103.45, the lowest since late August. At the time of writing, AUD/USD is holding lower ground near 0.6557, losing 0.06% on the day.
US Treasury yields edge lower and US equities were marginally higher at the start of US Thanksgiving. With little economic data forthcoming, the attention will be on the minutes of the FOMC meeting, which are expected to be released late Tuesday. The report may include signals regarding future policy rate direction and inflation improvement. Market players raised their bets that the Federal Reserve (Fed) is done raising the interest rate and have priced in a 100 basis point (bps) rate cut in the first half of 2024.
On the other hand, commodity prices rose as investors became more optimistic about additional Chinese stimulus measures and the end of the Fed's rate hike cycle. This, in turn, boosts the China-proxy Australian Dollar (AUD). The Reserve Bank of Australia (RBA) Governor Michele Bullock will deliver a speech on Tuesday and RBA will also publish the minutes of its recent meetings later.
Markets anticipate a rate cut in 2024, but the RBA is still attempting to convince markets that rate hikes are still on the table and it is not talking about cutting rates. If the statement delivers a surprisingly hawkish tone, this could lift the AUD and act as a tailwind for the AUD/USD pair.
Looking ahead, market players will closely watch the RBA Meeting Minutes and RBA Governor Michele Bullock’s speech. The US Existing Home Sales and the Chicago Fed National Activity Index will be released on Tuesday ahead of the FOMC Meeting Minutes from its latest meeting. Traders will take cues from these figures and find trading opportunity around the AUD/USD pair.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays in positive territory above 1.0850 after US data
![EUR/USD stays in positive territory above 1.0850 after US data](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/EURUSD/money-euro-and-dollar-banknotes-17371247_XtraSmall.jpg)
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
![GBP/USD stabilizes above 1.2850 as risk mood improves](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/GBPUSD/strong-pound-weak-dollar-17536259_XtraSmall.jpg)
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
![Gold rebounds above $2,380 as US yields stretch lower](https://editorial.fxstreet.com/images/Markets/Commodities/Metals/Gold/gold-gm187363896-28836378_XtraSmall.jpg)
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
![Avalanche price sets for a rally following retest of key support level](https://editorial.fxstreet.com/images/Avalanche/Avalanche_XtraSmall.jpg)
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
![The election, Trump's Dollar policy, and the future of the Yen](https://editorial.fxstreet.com/images/Macroeconomics/Events/US%20Elections/Donald_Trump_closeup_XtraSmall.jpg)
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.