USD to AUD Rate Stays Near 0.65 Despite Jump in Australian Inflation
The USD to AUD rate has pushed back above 0.65 twice after the break below, but buyers can’t hold gains and AUD/USD has returned below it again.
The Australian dollar (AUD) has been under sustained pressure over the past two months, weighed down by a strengthening US dollar (USD), which pushed the AUD/USD pair below the 0.65 mark. Last week, however, a brief recovery saw the pair rise by approximately 1 cent. This uptick followed Monday’s bullish gap, attributed to the appointment of a market-friendly Treasury Secretary by Donald Trump and a truce agreement between Israel and Palestine.
AUD/USD Chart H4 – MAs Continue to Push the Highs Lower
Despite this temporary rebound, the AUD/USD pair reversed course, closing the bullish gap and falling below the prior week’s lows. The 100 SMA (green) acted as resistance, halting further upward momentum and rejecting the recovery attempt.
The Reserve Bank of Australia’s (RBA) meeting minutes last week highlighted the central bank’s commitment to restrictive monetary policy. RBA Governor Michele Bullock emphasized the need to maintain elevated interest rates until inflation is firmly under control, signaling a vigilant stance against upside inflation risks.
Australian Inflation and Trade Concerns
Australia’s CPI inflation showed an uptick today, which could weigh on sentiment amid broader concerns of a potential US-China trade war. President-elect Donald Trump’s proposal to impose tariffs of up to 60% on Chinese goods, aimed at protecting US businesses, poses a challenge for Australia. Given its deep trade ties with China, such policies could have significant economic repercussions for the Australian economy.
The combination of restrictive monetary policy, inflationary pressures, and geopolitical uncertainties continues to shape the outlook for AUD/USD , leaving the pair vulnerable to further volatility.
October CPI Inflation Report From Australia
- Headline CPI (Year-on-Year):
- October: 2.1%, matching September but falling short of the 2.3% forecast.
- Core Trimmed Mean CPI (Year-on-Year):
- October: 3.5%, up from 3.2% in September.
The October CPI data for Australia shows mixed signals. While the headline inflation rate remained steady at 2.1% y/y and missed expectations, the core trimmed mean CPI rose to 3.5% y/y, indicating stronger underlying inflation pressures. This divergence suggests that while general price increases are stabilizing, persistent inflation in core categories may prompt continued scrutiny of monetary policy.
AUD/USD Live Chart
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