AUD/USD: Australian Dollar at 10-Week Low, RBA Remains Hawkish
2024.10.28 12:02
The is showing limited movement on Monday. In the European session, AUD/USD is trading at 0.6609, up 0.13%. It has been a bumpy ride for the Aussie, which is coming off a fourth straight losing week and is down a massive 4.4% in October.
RBA’s Bullock says inflation will remain high
The Reserve Bank of Australia meets next week and is widely expected to maintain the cash rate at 4.35%. The RBA has become an outlier among the major central banks, most of which have embarked on a rate-cutting cycle in response to falling inflation. The RBA, however, has been hawkish about rate policy and has discussed the possibility of rate hikes at recent policy meetings.
The RBA’s annual report, published Friday, reiterated that inflation remained high and that inflation would not be sustainable within the 2%-3% target for ‘another year or two’. This signals that the central bank plans to continue its restrictive policy for some time and a rate cut isn’t likely before 2025.
Australia releases third-quarter inflation on Thursday. Headline CPI is expected to fall from 3.8% to 2.9% but core CPI, which is considered more important, and is expected to remain closer to 4%. The cautious RBA is unlikely to consider a rate cut before the core rate is closer to 3%.
The RBA peak rate of 4.35% is significantly lower than the peak rate of the Fed, the BoE and the ECB, which means that the RBA won’t have to cut as much its counterparts when its joins the rate-cutting club.
AUD/USD Technical
- AUD/USD tested support at 0.6588 earlier. Close by, there is support at 0.6571
- There is resistance at 0.6617 and 0.6634
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