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In late Asian trading on Tuesday, the AUD/USD rally stalled near 0.6520 as investors prepared for the 11:30 Reserve Bank of Australia monetary policy meeting. In contrast to the AUD, rising US bond yields were largely responsible for the 0.36% decline in AUD/USD.
The Australian dollar’s rise paused as the market awaited the Reserve Bank of Australia’s policy meeting, where the Reserve Bank of Australia is expected to raise interest rates.
Four of Australia’s largest banks, including ANZ, the Central Bank of Australia (CBA), Westpac and National Australia Bank (NAB), revealed that the Reserve Bank of Australia is expected to resume interest rate increases and will raise interest rates to 4.10% Raised to 4.35%. The latest inflation report released by the Australian Bureau of Statistics (ABS) showed that Australian inflation rose in the third quarter, higher than expected, but below the 2% ±1% range.
While the above data is not a reason for the Reserve Bank of Australia to raise interest rates, annual inflation exceeded 5.6% in September, surpassing August. This, coupled with solid retail sales, has fueled speculation that the Reserve Bank of Australia will further tighten monetary policy.
Reserve Bank of Australia official Christopher Kent said that the Reserve Bank of Australia “may need to raise interest rates in the future to reduce inflation.” Reserve Bank of Australia Governor Michele Bullock also said that “if the inflation outlook clearly rises,” Australia will The Reserve Bank will not hesitate to raise interest rates.
More information: Preview of the Reserve Bank of Australia decision: The Reserve Bank of Australia will further tighten monetary policy after four consecutive times of no action
In the US, light economic events will keep AUD/USD traders focused on speeches from Fed officials, the trade balance and the IBD/TIPP Economic Optimism Index.
