Aussie dollar struggles despite RBA’s rate hike focus

The currency pair remains restrained, trading around 0.6550 after an initial peak at 0.6589. This comes in the wake of the Reserve Bank of Australia’s (RBA) latest meeting minutes, which outlined a determined approach to raising interest rates in efforts to tackle high inflation. Despite this hawkish stance, the Australian Dollar failed to sustain gains above the 0.6560 mark.

In recent developments affecting the currency landscape, data revealed that October’s US Existing Home Sales dropped to 3.79 million, underscoring challenges within the housing market. Meanwhile, minutes from the Federal Reserve’s Federal Open Market Committee (FOMC) meeting kept interest rates steady between 5.25% and 5.50%. Federal Reserve officials conveyed a neutral position but did not close the door on potential rate increases should inflation persist.

From a technical perspective, the AUD/USD pair is encountering resistance near a significant level, specifically the 200-day moving average (DMA) at 0.6588. A move below Monday’s close of 0.6556 could pave the way for a decline towards the support level around 0.6500.

The market’s reaction has been notably visible in the (DXY), which maintains its strength at 103.61, indicating a prevailing preference for the US dollar as investors process signals from central banks.

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