- Australia’s central bank held rates steady for a third consecutive month.
- The Australian dollar depreciated, reaching its lowest point in over a week.
- Market expectations for one last rate hike before year-end decreased from around 36% to just 30%.
Today’s AUD/USD outlook is bearish as Australia’s central bank held rates steady for a third consecutive month. Moreover, it signaled a potential end to the tightening cycle as policymakers displayed greater control over prices.
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During the September policy meeting, the Reserve Bank of Australia (RBA) maintained rates at 4.10%. Furthermore, it stated that recent data align with the goal of inflation returning to the 2–3 percent target range by late 2025.
However, it emphasized the possibility of further tightening to rein inflation. Still, the central bank opted for a pause given underwhelming economic indicators, such as inflation, wages, and employment.
As a result, the Australian dollar depreciated, reaching $0.6384, marking its lowest point in over a week. Meanwhile, market expectations for one last rate hike before year-end decreased from around 36% to just 30% during the session.
Although most economists still anticipate one more hike by year-end, Lowe emphasized the need for continued monitoring of the global economy. He emphasized attention to uncertainties surrounding the Chinese economy, household spending, and the inflation and labor market outlook.
Moreover, Lowe highlighted the significant rise in prices for various services and elevated rent inflation. Minutes from the August meeting revealed that the central bank now envisions a credible path to achieve the inflation target by 2025 at the current interest rate level. This implies a high threshold for further rate hikes.
AUD/USD key events today
Investors will continue absorbing statements from the RBA policy meeting as no other key economic releases are planned for the day.
AUD/USD technical outlook: Price plummets, breaching key support levels.
On the charts, AUD/USD has fallen suddenly, breaking below the 0.6450 and the 0.6400 support levels. This steep decline has left the 30-SMA far above, indicating a strong bearish move. Moreover, the RSI is about to dip into the oversold region, showing solid bearish momentum.
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The price is now heading for the next support at 0.6350. If bears are still as strong at this level, the price will likely break below and continue the descent. However, if they are exhausted, the price might pause at 0.6350.
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