- Westpac economists now predict that Australian interest rates will rise in November.
- The Australian dollar dipped to an 11-month low before recovering.
- Futures indicate a 60% chance of the RBA resuming its tightening cycle in November.
The Aussie danced with uncertainty on hopes of a return of RBA rate hikes, painting a somewhat optimistic brush on the AUD/USD outlook. Westpac economists now predict that Australian interest rates will rise in November. They’ve adjusted their stance due to surprisingly high inflation figures.
-Are you interested in learning about the forex signals telegram group? Click here for details-
Notably, Westpac’s Chief Economist, Luci Ellis, believes that the Reserve Bank of Australia will likely boost the cash rate by a quarter point to 4.35% at their next meeting on November 7. This is a change from her previous expectation of a stable outlook.
According to Ellis, inflation is decreasing. However, it is not decreasing rapidly enough for the RBA to keep rates unchanged. She acknowledges that it will be a closely balanced decision. Moreover, there’s still a possibility that they may decide to maintain the current rates.
Meanwhile, the head of Australia’s central bank mentioned that the strong third-quarter inflation report aligns with policymakers’ expectations. Still, they are evaluating whether it justifies a rate increase. RBA Governor Michele Bullock had previously warned that they won’t hesitate to raise interest rates further if there’s a “material” upward revision to the outlook.
Consequently, the Australian dollar dipped to an 11-month low before recovering. Currently, futures indicate a 60% chance of the RBA resuming its tightening cycle in November after four rate pauses. The third-quarter inflation surpassed the central bank’s August forecast, raising concerns about whether the RBA can lower inflation.
AUD/USD key events today
With no reports from Australia, traders will focus on the US, which will release reports on:
- Initial jobless claims.
- Pending home sales.
- Core durable goods orders.
AUD/USD technical outlook: Price retests the 0.6300 key level.
On the charts, the AUD/USD price has had a whiplash move. The price initially broke below the 0.6300 support level before pulling back sharply. Still, the bearish bias remains as the price is below 30-SMA. At the same time, there is support for bearish momentum as the RSI is below 50.
-Are you interested in learning about forex indicators? Click here for details-
However, if bulls close above the 0.6300 key level, they might challenge the 30-SMA resistance and the 0.6350 key level. On the other hand, if the 0.6300 level is strong, bears will likely propel the downtrend to the 0.6260 support level.
Looking to trade forex now? Invest at eToro!
68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money