Australian dollar consolidates below a three-month high ahead of RBA
On Monday, the Australian dollar (AUD) continues to rise and is expected to reach a three-month high. For the fourth day in a row, the AUDUSD pair is rising as traders prepare for the Reserve Bank of Australia’s (RBA) expected interest rate announcement on Tuesday.
In its policy announcement on Tuesday, the RBA is predicted to raise interest rates by 25 basis points.
The central bank of Australia is scheduled to declare its policy decision on Tuesday. A 25 basis point increase is anticipated, which would be consistent with Australian inflation. Australian Dollar (AUD) support as it teeters at the edges. In addition, the RBA Shadow Board recommends raising the cash rate in November. The likelihood of increasing the cash rate to a level over 4.10% is assigned a 62% probability.
The US Dollar’s drop helps the Australian Dollar gain ground.
An enhanced risk appetite causes the AUDUSD pair to rise even more. Cooling economic indicators from the United States (US) suggest that the US Federal Reserve (Fed) may have finished tightening monetary policy, which is what is driving this sentiment.
The US Dollar Index (DXY) fell by more than 1.0% during the last session. The negative US Treasury yields, which were a response to the lower-than-expected nonfarm payrolls reported on Friday, had an impact on this fall. The depressing jobless figures added to the gloomy mood for the US currency (USD).
Australian dollar continues to rise on the decline in the US dollar, with attention shifting to the RBA’s policy announcement.
Australia’s TD Securities Inflation dropped from 5.7% in August to 5.1% in September.
Australia’s TD Securities Inflation (YoY) dropped from 5.7% in August to 5.1% in September.Australia’s retail sales increased from the prior reading of -0.6% to 0.2% in the third quarter.
Aussie Trade Balance (Month-on-Month) dropped from 10,161 million to 6,786 million in September, below the projected 9,400 million.
Furthermore Australia’s monthly Consumer Price Index (CPI) increased by 5.6% in the year ending in September 2023. Nonetheless, in Q3, the quarterly inflation rate decreased to 5.4% year over year.
The October Non-Farm Payrolls (NFP) report, released by the US Bureau of Labor Statistics, revealed a number of 150K. This was not the anticipated 180K, which was a significant decrease from September’s 297K.
The US Average Hourly Earnings (Month-on-Month) decreased to 0.2% versus the forecast 0.3%. It performed better than expected, coming in at 4.1% on a year-over-year basis.
Moreover From 53.6 to 51.8, the US ISM Services Purchasing Managers’ Index (PMI) decreased. Furthermore, the US Department of Labor announced on Thursday that there had been a rise from 212,000 to 217,000 initial claims for unemployment benefits for the week ending October 27.
