🥇 First rule of investing? Know when to save! Up to 55% off InvestingPro before BLACK FRIDAYCLAIM SALE

AUD/USD: Australian Dollar Rises on Higher Inflation

Published 11/05/2024, 06:04 AM
AUD/USD
-

The AUD/USD has started the new trading week with strong gains. In the European session, AUD is trading at 0.6509, up 0.64% on the day. The Aussie is coming off a fifth consecutive losing week and plunged 4.8% in October.

Australia’s Melbourne Institute Inflation Gauge rose 0.3% in October, up from 0.1% in September and above the market estimate of 0.2%. This was the highest reading since July and the timing is significant as the Reserve Bank of Australia meets on Nov. 7.

RBA Expected to Hold Rates

The RBA is widely expected to maintain the cash rate at 4.35% for an eighth straight time, as policymakers look to extend the “higher for longer” rate policy until inflation is sustainably within the RBA’s target of 2%-3%. Headline inflation fell to 2.8% y/y in the third quarter of 2024 but services inflation has been sticky and rose in the third quarter to 4.6% from 4.5% in the second quarter.

The markets don’t expect the central bank to make an initial rate cut before next year, with April the most likely start date. The RBA’s hawkish stance has put it out of sync with other major central banks, which have started trimming rates in response to falling inflation.

With little doubt that the RBA will hold rates, investors will be focusing on the Board’s statement, which is expected to remain cautious. The RBA can point to a list of reasons not to cut rates just yet – high inflation, a strong labor market and geopolitical uncertainty. As well, the US election and the makeup of Congress is a major uncertainty and a Trump win could trigger trade turmoil.

AUD/USD-4-Hour Chart

AUD/USD Technical

  • AUD/USD is testing support at 0.6605. Below, there is support at 0.6571.
  • There is resistance at 0.6651 and 0.6685.

Original Post

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.