Get started

RBA

Aussie dips after soft wage dataThe Australian dollar has extended its losses on Wednesday. In North American trade, AUD/USD is trading at 0.6824, down 0.47%. Australian wage growth was short of the forecast, with a gain of 0.8% q/q in Q4 2020. This was down from 1.1% in Q3 and below the forecast of 1.0%. Annual wage growth rose to 3.3%, up from 3.2% but below the estimate of 3.5%. This will be welcome news to the RBA, which is concerned that high inflation could lead to a price-wage spiral that would entrench inflation expectations and complicate efforts to curb inflation. The RBA has hiked interest rates by 325 basis points in the current cycle but the battle against inflation rages on. Inflation rose to 7.8% in Q4 2022, its highest level since March 1990. The central bank's steep tightening is yet to curb inflation, and Lowe faced criticism of his rate policy when he appeared before a parliamentary committee last week. Lowe told the lawmakers that high inflation was "dangerous" and reiterated that future rate moves would be data-driven. The cash rate is currently at 3.35% and the markets have priced a peak rate of 4.1%. The RBA has signalled that more rate hikes are coming and we're likely to see a 25-basis point hike for a fifth straight time at the March meeting, barring some unexpected data. All eyes are on the Federal Reserve, which will release the minutes of its February meeting later on Wednesday. The Fed raised rates by 25 bp, but investors will be interested in the extent of support for a 50-bp hike at the meeting as a clue what to expect from the March 22 meeting. It was only a few weeks ago that the markets were confident that the March meeting would provide a 'one and done' rate increase and the Fed would cut rates late in the year. The blowout employment report, a strong retail sales release and higher-than-expected inflation have changed that narrative. The markets have moved closer to the Fed's hawkish stance, and Goldman Sachs and the Bank of America are projecting three more rate hikes in 2023. AUD/USD has support at 0.6784 and 0.6690 There is resistance at 0.6907 and 0.7001
by OANDA
AUDUSD Remains Bearish Despite Hawkish RBAMarkets are slow, they did not change much for the last sessions. Well, the only mover of the Asian session is AUD which found support at rallied after RBA hiked from 3.10% to 3.35% as expected. More important RBA mentioned that further hikes will be needed to bring down inflation, which is not a surprise after a latest jump in CPI figures. But despite the hawkish policy, AUDUSD did not gain that much, so I still think that further potential weakness on the pair can show up, but mostly because of USD domination after reversals last week. From an Elliott wave perspective, we see nice and clear five waves down, so more weakness will be expected after A-B-C. Nice resistance can be at 0.7-0.705.  We talked about aussie yesterday in LIVE WEBINAR here on tradingview. For recording CLICK HERE www.tradingview.com
Short
by ew-forecast
1
Looking ahead into February 2023 (AUD)Throughout the month of January, the AUDUSD traded consistently higher within a bullish channel, after bouncing off the 0.67 round number support level, at the start of the year. While the move higher was primarily driven by the weakness in the DXY, 2 CPI y/y data releases (inflation growth indicator) and no Reserve Bank of Australia (RBA) interest rate decision provided additional stimulus to the climb higher. On the 11th of January, the CPI y/y data was released at 7.3% (Forecasted: 7.2% Previous 6.9%). The release of higher than previous data showed that inflation was still growing in Australia for the month of December, despite the RBA's approach of consistently hiking interest rates, to the current rate of 3.10%. Price reacted positively as it bounced off the 0.6870 level to trade higher. Again on the 25th of January , the CPI y/y data was released at 8.4% (Forecast: 7.6% Previous: 7.3%), this time for the month of January. Continual inflation growth, signaled to the market to increase bets for further rate hikes to come from the RBA. This time, the price broke through the 0.7045 previous swing-high and near-term resistance to trade strongly to the upside, testing the 0.7140 resistance area (last reached in August 2022). So, where could the AUD move to in February? The next directional movement of the AUDUSD will be highly dependent on the outcome of the US Federal Reserve interest rate decision on 2nd February. (read the DXY analysis in the link below) Anticipating some downside potential on the AUDUSD, if the US Federal Reserve raises rates without making a comment regarding a slowdown/pivot. The AUDUSD could break out of the current bullish channel to trade down to the 0.6870 price level. On the 7th of February, the RBA is due to release its interest rate decision, with current rates at 3.10%, the market expectation is for another rate hike of 25bps. It would be crucial to pay attention to the accompanying statement for hints regarding further rate hikes in 2023. However, the statement would most likely be in the tone of "future rate hikes will be data dependent, with an expectation for further inflation growth in the near term." Read my previous write up regarding the RBA interest rate decision. Price tends to fall following the release of a rate hike. Is this going to happen again for the AUDUSD in February? If the price breaks down from the bullish channel the next support level is at the 0.6870 level. Beyond the immediate resistance level of 0.7140, the next key resistance level is at the 0.73 price area.
Short
by JinDao_Tai
7
Another hawkish RBA hike, but will Jerome Powell turn AUD lower?Summary of the RBA’s February 2023 statement: • The RBA hiked the cash rate target by 25 basis points to 3.35% • Underlying inflation was above expectations at 6.9% • Strong domestic demand is adding to the inflationary pressures • CPI is expected to decline this year due to global factors and slower growth in domestic demand • Medium-term inflation expectations remain well anchored, and it is important that this remains the case • The labour market remains very tight • Wages growth is expected to continue picking up due to the tight labour market and higher inflation • The board will continue to pay close attention to labour costs and the price-setting behaviour of firms in the period ahead • Further increases in interest rates will be needed over the months ahead The RBA hiked the overnight cash rate by 25bp to 3.35% - its highest level since September 2012 – and warned of further increases in the months ahead. The two key words here are ‘increases’ and ‘months’, as it implies more than one hike over the coming months. And with rates at 3.35% it means the market pricing and consensus among economists for a terminal rate of 3.6% is not correct. Given that the employment situation remains robust, inflation is higher than they expected and ‘strong domestic demand is adding to inflationary pressures’, we have several green lights for a hike in March and perhaps in May. Perhaps we’re closer to the elusive pause they teased us with last year, but I see no immediate threat of one in that statement. And whilst the RBA expect CPI to decline as global factors and growth in domestic demands slows, what is going to happen if they do not slow quickly enough? Yep, more hikes. For now, a March hike seems like a done deal and I live in hope they hint at a pause, but I will not hang my hat on that given the data overall and strong levels of inflation. AUD/USD 1-hour chart: The Aussie bounce around 1% after the rate decision, but it is debatable as to whether it can retain its strength if Jerome Powell delivers a hawkish message overnight. The Fed’s rate remains above the RBA’s, with a higher expected terminal rate. AUD/USD found support around the 50-day EMA and has since spiked higher, but bears may want to seek evidence of weakness around 0.6900 as it houses the monthly pivot point and broken trendline. Of course, should Powell fail to deliver the hawkish message, then it leaves AUD (and other FX majors) more wriggle room to unwind some of their post-NFP losses.
Short
by CityIndex
AUD/USD slides after soft Aussie job reportThe Australian dollar has extended its slide on Thursday. AUD/USD is trading at 0.6884 in Europe, down 0.82%. Australia's December employment report was weaker than expected, sending the Australian dollar sharply lower. The headline reading showed a loss of 14,600 in total employment, which may have soured investors. The release wasn't all that bad, as full-time jobs showed gains of 17,600, with part-time positions falling by 32,200. The unemployment rate remained at 3.5%, but this was a notch higher than the forecast of 3.4%. On the inflation front, recent releases point to inflation moving higher. November CPI rose to 7.3%, up from 6.9%, and the Melbourne Institute Inflation Expectations climbed to 5.6%, up from 5.2%. We'll get a look at the all-important quarterly inflation reading next week. Inflation came in at 1.8% q/q in Q3, and an acceleration in Q4 would force the Reserve Bank of Australia to consider raising rates higher and for longer than it had anticipated. The cash rate is currently at 3.10%, and I expect the RBA will raise it to 3.50% or a bit higher, which means we are looking at further rate hikes early in the year. The US dollar seems to take a hit every time there is a soft US release, and this week has had its share of weak data. The Empire State Manufacturing Index sank to -32.9, while headline and core retail sales both fell by -1.1%. PPI came in at -0.5%. All three releases were weaker than the November readings and missed the forecasts, indicating that cracks are appearing across the US economy, as the bite of higher rates is being felt. The markets are clinging to the belief that softer numbers will force the Fed to ease up on its pace of rate hikes and possibly end the current rate-cycle after a 25-bp increase in February. The Fed has done its best to dispel speculation that it will pivot, but I expect the US dollar to lose ground if key releases are weaker than expected. AUD/USD is testing support at 0.6893. Below, there is support at 0.6810 0.6944 and 0.7027 are the next resistance lines
by OANDA
Aussie shrugs off soft GDPThe Australian dollar is showing limited movement for a second successive day. In European trade, AUD/USD is trading at 0.6696, up 0.12%. Australia's economy underperformed in Q3, with a modest gain of 0.6% m/m. This was lower than the Q2 print of 0.9% and beneath the 0.7% consensus and also marked the weakest quarterly growth this year. Annualized GDP climbed 5.9%, an improvement from 3.6% in Q2 but shy of the consensus of 6.2%. The RBA is projecting that GDP will continue to slow through to 2024. The economy is showing clear signs of slowing down. Services, manufacturing and construction PMIs are all in decline. There was more bad news this week - Current Account for Q3 showed a deficit for the first time since 2019 and Company Operating Profits fell by 12.4% in the third quarter. Household spending remains strong, but high inflation continues to erode savings and consumers will have no choice but to cut back on spending at some point. Inflation has been more persistent than the RBA anticipated, and Governor Lowe has reiterated that inflation is a "scourge" that must be defeated. The RBA would prefer to avoid a recession, but it will be a tricky task to guide the economy to a soft landing. The RBA raised rates by 25 bp on Tuesday, bringing the cash rate to 3.10%. The move was widely expected. As a result, the Australian dollar showed a muted response. There was little of note in Governor Lowe's rate statement, which was almost identical to the November statement. Lowe noted that the RBA expects to increase rates, but "is not on a pre-set course" and rate decisions would be data-dependent. This last point may seem obvious, but events such as consumer spending, employment and inflation will be key drivers which determine rate policy in the early part of 2023. There is a great deal of uncertainty as to the terminal rate, which forecasts ranging from 3.3% all the way to 3.8%. This means there is some life left in the current rate cycle, and there is a strong possibility that the RBA will deliver another 25 bp hike at its next meeting in February. AUD/USD tested support at 0.6676 earlier. Next, there is support at 0.6558 There is resistance at 0.6760 and 0.6878
by OANDA
The RBNZ could push AUD/NZD down to the 1.07 and 1.06 handlesIf the RBNZ hike by 75bp tomorrow in line with the consensus, it will be their first hike of this magnitude on record. It would also mean they have to upgrade their terminal rate of their OCR projection, which could be deemed as a hawkish hike by markets and send NZD higher against other currencies. Of course, this also leaves the Kiwi dollar to weakness should the RBNZ surprise markets with a 50bp hike tomorrow. As things stand, the RBA are expected to hike in 25bp increments and have even spoken of a potential 'pause' in rate hikes. This means RBNA remain the more hawkish than the RBA. This has allowed AUD/NZD to develop a nice bearish trend on the daily chart with timely swing highs, and prices are now on the cusp pf breaking lower and heading for 1.0700 and 1.0612. Unless we see a surprise 50bp hike tomorrow, the path of resistance appears lower for the cross and bears could seek to fade into rallies or short a break of new lows. - Initial target is 1.0700, then the 1.0612 low. - The bias remains bearish below 1.0900.
Short
by CityIndex
$NZDUSD: Tight stop, big target...I think the Kiwi offers a tremendous reward to risk ratio on the short side here. The situation with persistent inflation and rising energy prices is certainly a headwind for the economy, combined with Powell's increased determination as per his last speech at Jackson Hole, has helped bears gain ground here, triggering both a daily and a weekly down trend simultaneously. The invalidation for this signal is a move back above the 0.6255 mark, in which case a short squeeze would happen. Currently, the chart signal points to a decline towards 0.5762 by October 21st, the latest. Overall, good setup in the currency market to add to a more holistic trading portfolio (like mine). Any market that adds uncorrelated returns, is a good use of leverage/cash. Best of luck, Ivan Labrie.
Short
by IvanLabrie
2
$AUDUSD: Looking like a bottom...I suspect the Dollar Index is reversing, so I am identifying the currency pairs best positioned to rally from here. Given Australia's commodity exports, the Aussie pair is likely to benefit from increasing demand for copper, iron ore, lithium, to name a few, for years to come. Such tailwind won't help much if the Federal Reserve is still embarking in QT and tightening sprees, but we have some evidence pointing to a chance for CBs and govts/treasuries to reverse course or engage in some sort of policy reversal or pivot, via various tools at their disposal on the fiscal and monetary side of things. The headwind for Australia and Asia/Pacific being China as a wild card, post CPC 20th Congress, and black swan risk of a Taiwan invasion. That said, if conflict does arise, precious metals would likely rally, and probably help boost the Aussie dollar as well. Overall I suspect we are headed for a long period of outperformance for commodities and commodity exporters' currencies in the FX realm. Emerging Markets become interesting in that regard as well, worth looking into them for opportunities too. Cheers, Ivan Labrie.
Long
by IvanLabrie
1
AUD/USD coils up ahead of the retail sales and RBA's MPSThe Aussie fell to below the 0.6300 target zone yesterday (marked by last week's VPOC - or volume point of control) With the RBA's quarterly MPS (monetary policy statement) and retail sales released at today at 11:30 AEDT, perhaps upgraded inflation forecasts can give the Aussie a bump higher. But whilst prices remain beneath the monthly pivot point, such bounces are likely to appeal to bears for swing trade shorts. However, the US dollar remains a force to be reckoned with so the core view on AUD remains bearish given the RBA's lack of hawkish interest (on a relative basis). A break of yesterday's low assumes bearish continuation and brings the support zone around 0.6200 into focus for bears.
Short
by CityIndex
2
GBPNZD GAINS AS NZD DECLINESAs China reaffirmed its commitment to its zero-corona strategy, dashed hopes for an economic revival that may increase global demand, the New Zealand currency declined below $0.59, erasing gains after a robust surge. China has said that it will continue to impose restrictions in the interim. Naturally, that raises the possibility of a possible adjustment as markets progressively reopen this week. As a result, everything is "volatile, reactive, and globally fluid. Officials from the Reserve Bank of New Zealand stated that, despite warning of potential downside risks to the global economy, the country's high inflation and tight labor market call for a cooling of demand. The Reserve Bank of New Zealand increased interest rates by half a percentage point in October, but markets now expect a greater increase of 75 basis points in November.
Long
by TradeyMarkets
AUD/NZD - pullback over? 1.10 back in focusAustralian CPI beat expectations by a long mile yesterday, as did inflation for New Zealand in their most recent report. But the key difference between Australia and New Zealand for currency traders to be aware of is their central banks. The RBNZ have been far more aggressive than the RBA - with the latter dropping to 25bp rate increases and their rate remaining relatively low compared with their peers. And whilst the Aussie and Kiwi benefitted from a weaker dollar yesterday and AUD was given a 'bump' following Australia's inflation report, the fact remains that the RBA are not as hawkish as the RBNZ. We’ve seen the desired pullback into a resistance cluster (lower trendline, 20/50 EMA and 1.1191 low) and a bearish pinbar has formed to suggest a swing high is in place. The RSI(2) reached overbought on Tuesday before turning lower yesterday, which backs up the bias of a potential swing high. The 200-day EMA / support zone just below 1.10 is now in focus for bears - and AUD/NZD is likely to be a tempting swing trade short whilst prices remain beneath yesterday's high.
Short
by CityIndex
2
AUD/NZD weakness as central bank policies divergeTo strip out the effects of the Fed we can take a look at the moves in AUD/NZD, both bolstered by risk-on sentiment. In this pair, the 25bps hike from the RBA is clearly seen as the bank underdelivering on its mandate to bring inflation back to its 2% target, a clear divergence from the RBNZ so far. The bank is due to meet on November 23rd and markets are suggesting we may see a 75bps hike this time around as inflation continued to tick higher in Q3. Similar to AUD/USD, AUD/NZD saw a spike higher on the 26th of October after the Q3 CPI data was released and rate hike odds grew in favour of 50bps. But the two central banks are starting to diverge in policy and therefore the New Zealand dollar is likely to remain dominant over the coming weeks unless we see a shift in stance from either side, whether it be in form of data or commentary from officials. The 10-year yield differential between them has also been widening which supports AUD/NZD lower and the fact that we have broken below the 200-day MA for the first time since January this year suggests the pair may continue to drop, potentially breaking below support at 1.0920.
by Capitalcom
1
Aussie extends losses ahead of RBA meetingAUD/USD is down for a third straight day. The Australian dollar is trading at 0.6395, down 0.24%. The RBA kicks off a busy week of central bank decisions when it meets on Tuesday. This will be followed by the Federal Reserve on Wednesday and the Bank of England on Thursday. The RBA has delivered a steep rate-tightening cycle this year and the upcoming meeting will be live, as it remains unclear what the RBA has in store for the markets. The markets have priced in a second-straight 25-basis point hike, which would bring the cash rate to 2.85%, its highest level since April 2013. There is, however, a 20% chance that the RBA will hike by a steep 50 basis points, given that the Bank's focus is on curbing inflation and the battle remains far from over. Headline inflation jumped to 7.3%, up from 6.1% in Q2, while core inflation hit 6.1%, up from 4.9%. The RBA expects headline inflation to peak at 7.5%, but other views have inflation rising as high as 8.0%. RBA Governor Lowe has caught the markets wrong-footed before - the 50 bp move in June was larger than expected, and the 25 bp in October was a surprise dovish pivot. This makes it tricky to predict the extent of the rate hike on Tuesday -  the markets are leaning heavily towards a 25 bp increase, but a 50 bp move should not be discounted. For the Federal Reserve, inflation is also a key concern. The Fed's preferred inflation gauge, the PCE core index, rose to 5.1% in September, up from 4.9% a month earlier. That cements a 75 bp rate hike on Wednesday, even though there has been talk of the Fed easing up due to concerns about the economic outlook. AUD/USD is testing support at 0.6403. The next support level is 0.6283 There is resistance at 0.6532 and 0.6652
by OANDA
The week ahead - AUD (31 October 2022)AUDUSD reversed from the 0.6520 high last week to sit just above the 0.64 support level, ending the 250pip swing last week. The RBA interest rate decision is due on Tuesday and the expectation is for a rate hike of 25bps taking interest rates from 2.60% to 2.85%. In the previous meeting, the RBA conveyed that it was looking to tune back on the scale of future rate increases. However, recent CPI data from Australia indicated that inflation was still increasing, which might force the RBA to rethink the decision to slow down on the rate hikes. From the previous RBA rate decision, the price spiked up but was not able to sustain a move higher, only to trade lower later into the week. (check the previous RBA interest rates analysis) Check the DXY analysis, if the DXY does strengthen due to the FOMC interest rate decision, the AUDUSD could first fluctuate along the 0.64 price level before trading lower towards the 0.6170 support level.
Short
by JinDao_Tai
1
EUR/USD eyes ECB rate decisionEUR/USD is in a holding pattern ahead of today's ECB rate meeting. In the European session, the euro is trading at 1.0068, down 0.16%. The ECB holds its policy meeting later today, amidst difficult economic conditions in the eurozone. Inflation jumped to 9.9% in September, up sharply from 9.1%. The manufacturing and services sectors are in decline and confidence levels are low. The markets have priced in a 0.75% hike and there has even been talk of a jumbo full-point increase. Could the ECB surprise with a lower-than-expected hike of 0.50%? Earlier this week, the Bank of Canada (BoC) and Reserve Bank of Australia (RBA) both delivered smaller hikes than expected, at 0.50% and 0.25%, respectively.  The message from both central banks is that they are close to ending their rate-tightening cycles and expect inflation to peak in the next several months. Will the ECB follow suit? It's possible but unlikely. The ECB only entered the tightening game in July, and the current benchmark of 1.25% remains out-of-sync with inflation, which is close to double-digits and the ECB needs to be aggressive if it hopes to beat inflation. The benchmark rates are much higher in Canada (3.75%) and Australia (2.60%) and have slowed economic growth, while the ECB's low benchmark rate has not had the same effect. Still, the weak eurozone economy could tip into recession as a result of sharp rate hikes, which means that a 0.50% hike cannot be completely discounted. We can expect some movement from EUR/USD in response to the ECB decision - an increase of 0.75% or 1.00% will be bullish for the currency, while a 0.50% hike would disappoint investors and likely send the euro lower. There is resistance at 1.0095 and 1.0154 0.9924 and 0.9814 are the next support levels
by OANDA
AUD/USD might fall significantly to 2020 loweAustralian inflation surpassed estimates in the third quarter, reaching a 32-year high, and the Reserve Bank is expected to raise interest rates again to battle inflationary pressures. Rising rent and fuel prices were the primary causes of the reading being higher than expected, as Australia grappled with high borrowing rates and rising commodity prices. Food costs rose dramatically throughout the quarter due to a mix of supply chain issues and harvest-related adverse weather. According to the bank, it's trying to find a balance between limiting the negative consequences of high interest rates on the economy and controlling inflation. It hiked rates seven times this year from record lows and declared that future rate hikes will be data-driven. The pressure on AUD/USD is expected to continue. In light of this, Credit Suisse economists predict that the pair may plunge to a 2020 low of 0.5506. A steeper decrease in the AUD/USD exchange rate is anticipated. We anticipate a decline to the bottom from April 2020 at 0.6041/5978 and the 78.6% retracement of the 2020/21 upswing as long as medium-term momentum continues to be bearish. While another little halt is possible, a convincing break lower would increase the likelihood of a fall all the way to 0.5506, the 2020 bottom. "Any effort at a stronger move higher should be restrained at the sliding 55-day average of 0.6651."
Short
by TradeyMarkets
AUD/USD eyes job dataAUD/USD is considerably lower today, trading at 0.6273, down 0.57%. Australia releases employment data on Thursday, with the markets expecting that the report will show that the labour market remains robust. The economy is forecast to have created 25,000 jobs in September, following the 35,000 gain in August. Unemployment is expected to remain at 3.5%. The strong labour market has enabled the RBA to continue its sharp rate-tightening cycle, with the cash rate currently at 2.60%. The central bank plans to continue raising rates, as the focus is on curbing inflation, which came in at 6.8% in August. The October inflation report will be especially significant, as it will be released just days before the RBA meeting on November 1st (in addition to the quarterly CPI report, Australia has started releasing a monthly inflation release, but it covers only 70% of goods and services). Higher rates will curb inflation eventually, but the cost could be an economic recession. Already, households are straining their budgets as inflation remains red-hot and higher interest rates are increasing borrowing repayments. This will likely dampen consumer spending, a key driver of economic growth. The Australian dollar has hit hard times. Since August 1st, AUD/USD has plunged 550 points, as risk sentiment has taken a beating and the Federal Reserve's aggressive tightening has boosted the US dollar. China's economy has been struggling and the escalation of the Ukraine conflict, with no end in sight, has sapped the appetite for risk-related currencies like the Australian dollar. With the Fed likely to deliver more oversize rate hikes and China and Ukraine likely to remain hotspots, the outlook does not look bright for the Aussie. AUD/USD faces resistance at 0.6331 and 0.6460 0.6250 is under pressure in support. Below, there is support at 0.6121
by OANDA
AUD/USD rises to resistance ahead of RBA meetingThe RBA are expected to hike interest rates by 50bp at 14:30 today and take the cash rate to 2.85%. From here we suspect they’ll revert to 25bp hikes with the potential to pause in December or January. The Aussie remains within an established downtrend and within a wider bearish channel on the 4-hour chart. It appears it is within the third wave of a 3-wave correction, with the 50/100 EMA’s and monthly pivot point nearby for potential resistance levels. Should we see evidence of a swing high then then 0.6300 – 0.6360 comes into focus. Note the RSI(2) is recently moved over 90 to indicate the potential for a near-term high.
Short
by CityIndex
Today’s Notable Sentiment ShiftsAUD – The Australian dollar lost ground on Tuesday, having rallied sharply overnight, after the Reserve Bank of Australia delivered a smaller-than expected rate hike, even as central banks elsewhere are raising rates aggressively. The Commonwealth Bank of Australia, which had predicted the 25 basis points move, expects the central bank to hike by another 25 bps in November before pausing. They note: “From that point, our central scenario has the RBA on hold as they give themselves time to assess the lagged impact of rate rises on the Australian economy.”
by thunderpips
2
Short AUD/USD -RBA Interest rate hike only 25BP, won't beat Fed.As seen in the video - I am short the Aussie Dollar against the almighty greenback. The RBA needs to get more aggressive in hiking interest rates, in order to compete with the Fed in the US. The Dollar USD will continue to be strong against all other currencies as they raise interest rates aggressively and be the defense trade in these uncertain times. Although other currencies will fight to not go lower against the divergence in interest rates against the USD.
Short
by SmartMoneyTV
2
AUD/USD rebounds ahead of RBAAUD/USD has started the trading week with strong gains. The Aussie is trading at 0.6447, up 0.67%. Is the nasty slide over? The Australian dollar is coming off a third straight losing week. September was a disaster, as AUD/USD plummeted 6.4%. The escalation in the war in Ukraine, which has sapped risk sentiment, and the aggressive Federal Reserve have dampened market appetite for the risk-related Australian dollar. The RBA meets on Tuesday, and Bank members are widely expected to deliver a fifth consecutive hike of 50 basis points, which would take the benchmark rate to 2.85%. After that, the RBA may lower gears to 25bp moves. Governor Lowe has signaled that he would like to shift to 25bp hikes at some point, which would help guide the economy to a soft landing and avoid choking off economic growth. However, there is no indication that inflation has peaked, and soaring inflation was the primary reason for the RBA's sharp rate-hike cycle. The next inflation report will be released in late October, with the RBA November meeting just one week later. It's a safe bet that the size of the rate hike in November will depend to a large extent on that inflation report. In the US, the Fed may make a U-turn in policy before the end of the year, depending on the strength of the economy. The data can be conflicting, which was the case on Friday. The Fed's preferred inflation indicator, the Core PCE Index, rose 4.9% in August, up from 4.7% in July and above the consensus of 4.7%. At the same time, the University of Michigan sentiment index showed that inflation expectations for 5-10 years ticked lower to 2.8%, down from 2.7%. In the meantime, the Fed's hawkish stance has fuelled the US dollar's upswing. AUD/USD has support at 0.6450 and 0.6363 There is resistance at 0.6598 and 0.6685
by OANDA
AUD/USD dips after RBA minutesThe Australian dollar is in negative territory today. AUD/USD is trading at 0.6706, down 0.30% on the day. The RBA minutes of the September 6th meeting didn't shed any new light on the central bank's rate policy, and the Australian dollar's response has been muted. The minutes reiterated the message that the markets have already heard from Governor Lowe - additional rate hikes are coming, but the size of the hikes will depend on inflation and growth. The minutes noted that rates are approaching "normal settings". At the meeting, members argued over whether to raise rates by 25bp or 50bp - in the end, the Bank went for the latter option, bringing the cash rate to 2.35%. With no inflation or employment data prior to the October meeting, the RBA may still be up in the air with regard to the size of the rate hike right up to decision time. This will make for an interesting meeting which could trigger volatility from the Australian dollar. There are arguments to be made on both sides. Inflation rose to 6.1% in the second quarter, and as the RBA's number one priority, Lowe may want to keep the pedal on the floor until there are clear signs that inflation is moving lower. On the other hand, inflation expectations have slowed over three straight months, a possible indication that inflation may have peaked or will do so shortly. Lowe would very much like to guide the economy to a soft landing, which would be facilitated by a modest 0.25% hike. The Federal Reserve meets on Wednesday, with the markets expecting a 0.75% hike. There is about a 20% chance of a massive full-point hike. The markets will be listening carefully to the Fed's guidance - if it is hawkish, the US dollar should respond with broad gains. AUD/USD has support at 0.6623 and 0.6523 There is resistance at 0.6769 and 0.6869
by OANDA