AUDUSD – Daily Chart
The AUDUSD exchange rate trades above recent resistance at the 0.6798 level and is eyeing the larger obstacle at the pre-2024 high of 0.6870.
The Reserve Bank of Australia releases its latest interest rate policy at 12:30 pm HKT on Tuesday. The RBA is unlikely to give interest rate relief to borrowers at its September meeting with Australia’s inflation rate still stubbornly high.
Australia’s central bank has held interest rates at 4.35% since late 2023, as it seeks to squeeze borrowing and slow inflation. The bank’s board will meet over two days starting on Monday, with the decision and press conference delivered on Tuesday afternoon.
The RBA says that Australia is in a different position than many of its peers, with slower progress on inflation. Further pricing data for the Aussie dollar will also be available on Wednesday. The monthly data from the Australian Bureau of Statistics may show the consumer price index falling 0.2% in August. Analysts expect an annual rate of 2.7%, down from 3.5% in July.
Later on Tuesday evening, further data will come for the pair in the form of the latest US consumer confidence data. The market may shrug off any negative result because the latest 50 basis point cut in interest rates will take time to feed into consumer sentiment.
The US Federal Reserve enacted its largest rate cut since the financial crisis in 2008, turning its attention from fighting inflation to protecting the weakening labour market.
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