Australian Dollar stalls corrective slide from monthly high amid hawkish RBA and weak USD
- AUD/USD pulls back after touching a fresh monthly high, though it lacks follow-through.
- Middle East jitters weigh on investors’ sentiment and undermine the risk-sensitive Aussie.
- Falling bond yields drag the USD to a three-week low, limiting losses amid a hawkish RBA.
The AUD/USD pair retreats after hitting a fresh monthly high on Thursday, snapping a four-day winning streak and stalling its recent goodish recovery from sub-0.6900 levels, or the lowest since early July. Spot prices, however, lack follow-through and manage to hold above the 0.7000 psychological mark through the first half of the European session.
Fears of a further escalation of tensions in the Middle East weigh on investors' sentiment, which, in turn, prompts some selling around the risk-sensitive Australian Dollar (AUD). However, the recent hawkish comments from Reserve Bank of Australia (RBA) officials, along with the US Dollar (USD) selling bias, act as a tailwind for the AUD/USD pair and help limit further losses.
In fact, RBA Assistant Governor Christopher Kent said on Monday that there are reasonable indications that neutral interest rates are increasing both domestically and globally. Furthermore, RBA Deputy Governor Andrew Hauser warned earlier today that Q3 trimmed-mean inflation may run hotter than expected, keeping rate hike expectations alive ahead of the November 3 policy meeting.
Moreover, China's better-than-expected Q3 GDP print turns out to be another factor acting as a tailwind for the Aussie. The USD, on the other hand, extends its recent pullback from an 18-month peak and touches a fresh three-week trough as US Federal Reserve (Fed) officials recently signaled that there is no urgency to raise interest rates at the upcoming October 27–28 meeting.
Furthermore, US bond yields extend their retracement slide from multi-year highs, which keeps USD bulls on the back foot and offers some support to the AUD/USD pair. Meanwhile, USD bears might refrain from placing aggressive bets and opt to wait for more cues about the Fed's policy path. Hence, the focus will be on the outcome of a two-day FOMC meeting, starting Tuesday.
Australian Dollar Price Last 7 Days
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies last 7 days. Australian Dollar was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.72% | -1.59% | -0.77% | -1.54% | -0.61% | -1.64% | -1.83% | |
| EUR | 0.72% | -0.91% | -0.07% | -0.91% | 0.10% | -0.92% | -1.16% | |
| GBP | 1.59% | 0.91% | 0.82% | 0.02% | 1.00% | -0.10% | -0.22% | |
| JPY | 0.77% | 0.07% | -0.82% | -0.71% | 0.19% | -0.86% | -1.02% | |
| CAD | 1.54% | 0.91% | -0.02% | 0.71% | 0.90% | -0.15% | -0.23% | |
| AUD | 0.61% | -0.10% | -1.00% | -0.19% | -0.90% | -1.02% | -1.18% | |
| NZD | 1.64% | 0.92% | 0.10% | 0.86% | 0.15% | 1.02% | -0.21% | |
| CHF | 1.83% | 1.16% | 0.22% | 1.02% | 0.23% | 1.18% | 0.21% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
