|

AUD/USD stalls ahead of Reserve Bank of Australia’s decision

  • AUD/USD steady at 0.6624; focus on upcoming RBA decision, quiet US data, and UK bank holiday.
  • Wall Street ends higher, driven by optimism over potential Fed rate cuts.
  • ANZ analysts anticipate RBA will hold rates, possibly adopting a hawkish stance due to inflation trends.

The Australian Dollar registered minuscule gains compared to the US Dollar as traders braced for the Reserve Bank of Australia (RBA) monetary policy meeting. A scarce economic docket in the United States (US) and a bank holiday in the UK were the main drivers behind the “anemic” AUD/USD price action. At the time of writing, the pair trades at 0.6624, virtually unchanged.

Australian Dollar sees limited movement as markets anticipate key RBA monetary policy

Wall Street finished the session with gains amid an upbeat market mood due to investors' confidence that the Federal Reserve would begin to lower rates faster than expected. Meanwhile, on Tuesday, AUD/USD traders brace for the RBA’s monetary policy decision.

The RBA is expected to keep the cash rate unchanged at 4.35%, though there is speculation that the central bank might shift slightly hawkish following higher-than-expected inflation figures for Q1 2024. Analysts at ANZ Bank commented that they expect the RBA to tilt hawkishly in its post-meeting statement.

They added the RBA’s board might choose a form a word, such as “the risks of inflation not returning to the target in a reasonable timeframe has risen,” followed by “accordingly the Board is not ruling anything in our out.”

On the US front, Federal Reserve officials crossed the newswires. President of the Federal Reserve Bank of Richmond, Thomas Barkin expressed that he anticipates high interest rates will further slow the economy and help bring inflation down to the 2% target. Meanwhile, John Williams, the New York Fed President, mentioned that rate cuts are on the horizon, but the timing will be based on a comprehensive review of the data.

AUD/USD

Overview
Today last price0.6624
Today Daily Change0.0014
Today Daily Change %0.21
Today daily open0.661
 
Trends
Daily SMA200.6504
Daily SMA500.6533
Daily SMA1000.6583
Daily SMA2000.6522
 
Levels
Previous Daily High0.6649
Previous Daily Low0.6563
Previous Weekly High0.6649
Previous Weekly Low0.6465
Previous Monthly High0.6644
Previous Monthly Low0.6362
Daily Fibonacci 38.2%0.6616
Daily Fibonacci 61.8%0.6596
Daily Pivot Point S10.6565
Daily Pivot Point S20.6521
Daily Pivot Point S30.648
Daily Pivot Point R10.6651
Daily Pivot Point R20.6693
Daily Pivot Point R30.6737

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

More from Christian Borjon Valencia
Share:

Editor's Picks

AUD/USD eases from one-month high; holds above 0.7000 amid softer USD

AUD/USD pulls back slightly after hitting a fresh one-month high in the Asian session on Monday as bulls turn cautious ahead of the latest Australian consumer inflation figures and the crucial FOMC decision later this week. Meanwhile, expectations of another RBA rate hike in November support the Aussie. Moreover, a softer US Dollar helps the currency pair hold above the 0.7000 psychological mark.

USD/JPY extends recovery from one-month low beyond 157.00

USD/JPY kicks off the week on a positive note, building on Friday's modest bounce from the 156.00 neighborhood, or a one-month low amid some repositioning ahead of key central bank events and data risks. The Fed and the BoJ will announce their policy decisions on Wednesday and Friday, respectively. This, along with the release of Advance US Q3 GDP and the PCE Price Index on Thursday, should provide some meaningful impetus to the currency pair.

Gold struggles below $4,000 as oil-driven inflation fears reaffirm Fed hike bets

Gold attracts follow-through selling at the start of the new week, trading below $4,000 during the Asian session and near a three-month low. Higher energy prices continue to fuel inflation fears and reinforce US rate-hike expectations, undermining the non-yielding bullion. Bears, however, might refrain from placing aggressive bets ahead of the crucial FOMC meeting and other key central bank events this week.

Week ahead: Central bank and earnings bonanza could roil markets

After joining the rate-hike club in September, the Federal Reserve looks set to stand pat in October, waiting to assess more data before deciding to hike again. Whilst this isn’t an unusual move for a central bank, it somewhat contradicts Fed Chair Kevin Warsh’s new mantra of data dependency and zero forward guidance.

CFTC Report: WTI rally runs ahead of positioning
The week in one sentence: WTI prices surged while speculative longs were cut in the week to October 20, creating the clearest price/positioning divergence. Sterling and the Canadian Dollar led the constructive currency shift, while Yen longs also rebuilt. Speculators turned less constructive on the WTI, reducing their net exposure to around 89.3K contracts.
What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.