The Australian dollar traded near 0.7000 against the US dollar on Monday, under pressure from weak Asian equities and risk-averse sentiment. Traders were waiting for the Reserve Bank of Australia’s monetary policy decision. By our market data, as of 00:32 GMT on 3 November, AUD/USD stood at $0.7002.
Oil slides and the Fed outlook shifts
WTI crude fell 6.50% to $96.25 per barrel on Monday. Falling oil prices were seen as a sign that inflationary pressures could ease. US tech stocks edged lower after Apple’s earnings, which weighed on Asian equities.
Expectations for the Federal Reserve also moved. The CME FedWatch Tool put the probability of a 25-basis-point Fed rate hike at 72 percent, down from 80 percent a week earlier. The US Dollar Index fell 0.17 percent to 101.78.
RBA hike seen as the last of the cycle
The RBA is expected to raise rates by 25 basis points, which would take the policy rate to 4.85 percent. LSEG data put that move as the last hike of this year and of next year. ANZ analysts said the central bank faces hard choices amid supply shocks and constrained capacity.
ANZ expects an upward revision to the unemployment rate. It also expects the RBA to raise its forecasts, reflecting trimmed-mean inflation. Governor Michele Bullock’s press conference follows the decision.
Technical levels in focus
On the charts, AUD/USD sits near a broken uptrend line at 0.7117, with a simple moving average cluster around 0.7063 acting as resistance. The 14-period Relative Strength Index stood at 46.
Data: Swissquote
