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Source: Newsmaker.id
The AUD/USD pair remained above the psychological 0.7000 level on Monday (October 26), following a touch of a one-month high. The Australian dollar has found support from growing expectations that the Reserve Bank of Australia (RBA) will raise interest rates at its November meeting.
These expectations strengthened after RBA official Sarah Hunter suggested that inflation in Australia is not yet fully under control. Furthermore, the risk of inflationary pressure originating from abroad may persist for longer, creating an opening for the RBA to hike rates again.
Meanwhile, the US dollar remains under pressure due to a decline in US Treasury yields and hopes for an easing of geopolitical tensions in the Middle East. These conditions have allowed the AUD/USD to sustain its gains, though demand for the US dollar as a safe-haven asset remains a potential risk.
Market attention is now focused on Australian inflation data and the upcoming FOMC decision on Wednesday. Should Australian inflation show persistent, strong pressure, expectations for an RBA rate hike could intensify, providing further support for the Australian dollar.
Looking ahead, US third-quarter GDP and the PCE price index—due Thursday—will serve as key catalysts for the US dollar’s direction. If the US data reinforces expectations for further tightening by the Federal Reserve, the AUD/USD could face renewed pressure. Conversely, any weakness in the US dollar could allow the pair to maintain its positive trend. (srh)
Source: Newsmaker.id