- RBA Governor Philip Lowe says that they are prepared to ease policy further.
- US Dollar Index inches closer to 98 handle on Tuesday.
- Coming up: Pending home sales and CB Consumer Confidence Index data from the US.
The AUD/USD rose to its highest level in five days at 0.6860 during the Asian session boosted by heightened hopes of the United States and China finalizing the phase one of the trade deal at the APEC meeting in November.
However, with the Reserve Bank of Australia (RBA) Governor, Philip Lowe, adopting a dovish tone at his speech on Tuesday, the AUD struggled to preserve its momentum and erased a large portion of its daily gains. As of writing, the pair was still up 0.1% on the day at 0.6845.
While speaking at an annual public lecture in Canberra, Lowe said that the governing board was prepared to ease the monetary policy further and reiterated that rate cuts are helping the economy.
Focus shifts to FOMC
Later in the day, pending home sales and the Conference Board’s Consumer Confidence Index data from the United States will be watched closely by the participants. However, the market reaction to these data could remain limited as investors might want to remain on the sidelines ahead of Wednesday gross domestic product (GDP) report from the US and the Federal Reserve interest rate decision. Ahead of these events, the US Dollar Index is up 0.18% on the day at 97.91.
Analysts expect the Fed to lower its policy rate by 25 basis points. However, this policy move is already priced in the markets and participants will be focused on Chairman Powell’s remarks.
Technical levels to watch for
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