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FX Strategists at UOB Group noted the RBA is seen keeping the rates at current levels for the time being, while the Aussie Dollar should keep the negative stance.

Key Quotes

“The latest inflation figures reinforce our view that the RBA still has no reason to lift interest rates. In fact, the RBA has emphasized that, whilst the next move will likely be up , there is no rush to hike given wage growth and inflation remain uncomfortably low. Trade war jitters will also mean that rates will stay low for a long time to come. The next RBA meeting is scheduled for 6 November”.

“Falling to lows of 0.7072 earlier, AUD/USD has taken a double data hit, as a result of both weaker-than-expected domestic as well as Chinese data”.

“In recent FX Insight updates, we expected AUD “to trade with a slight downward bias” and were of the view that a break of the 0.7041 year-to-date low would shift the focus to 0.7000. This scenario is still intact but after last Friday’s price action, the prospect for a move to 0.7000 is not high. Meanwhile, the bias is still on the downside and only a break of 0.7140 would suggest the current mild downward pressure has eased”.