- RBA leaves policy rate unchanged at 1.5% as expected.
- US Dollar Index eases below 95.50 in the NA session.
- Coming up: FOMC Chairman Jerome Powell speech at 16:45 GMT.
The AUD/USD pair lost its traction in the Asian session and fell to its lowest level since September 18 at 0.7160 as the AUD weakened after the RBA announced its interest rate decision and published the monetary policy statement. However, with the greenback failing to preserve its bullish momentum in the American trading hours, the pair started to erase its losses and was last seen trading near 0.72, where it was down 0.35% on a daily basis.
Although the RBA left its policy rate unchanged at 1.5% as expected, it reiterated that interest rates were likely to stay at record-level for the ‘foreseeable future.’ Commenting on the RBA’s announcements, “the final paragraph in the Governor’s Statement is identical to the Statement in September, emphasising that progress in reducing unemployment and returning inflation to the target is likely to be gradual. While markets appear to be pricing in around a 40% probability of a rate hike by end 2019, we remain comfortable with our forecast that rates will remain on hold through 2019 and 2020,” Westpac analysts said.
On the other hand, the US Dollar Index, which advanced to its highest level in nearly a month at 95.74, went into a consolidation phase in the second half of the day amid a lack of significant fundamental drivers. The only data from the U.S. today showed that the ISM NY’s Business Conditions Index fell to 72.5 in September from 76.5 in August. At 16:45 GMT FOMC Chairman Powell’s speech will be looked upon for fresh impetus.
Technical levels to consider
The initial resistance for the pair aligns at 0.7210 (20-DMA) ahead of 0.7250 (50-DMA) and 0.7330 (100-DMA). On the downside, supports are located at 0.7160 (daily low), 0.7080 (Sep. 11 low) and 0.7000 (psychological level).
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