The Australian Dollar (AUD) continues to edge upward against the US Dollar (USD), hovering near a nine-month peak of 0.6839 as anticipation builds ahead of the Reserve Bank of Australia’s (RBA) policy meeting set for Tuesday. Analysts widely expect the RBA to keep the Official Cash Rate (OCR) steady at 4.35%, pointing to robust labor market conditions and ongoing inflationary pressures. Market sentiment suggests that no rate cuts will occur before December, with some forecasts pushing potential adjustments to as late as February or even the second quarter of 2025.
In related economic news, the ANZ-Roy Morgan Australia Consumer Confidence Index has climbed by 0.8 points this week, reaching 84.9. Despite this positive shift, consumer confidence has remained below the 85.0 threshold for 86 consecutive weeks, although the index has improved significantly year-over-year, rising by 8.5 points from a previous reading of 76.4.
Meanwhile, the US Dollar is facing headwinds as Federal Reserve officials indicate the likelihood of additional rate cuts totaling 50 basis points (bps) in 2024, following a significant 50 bps cut last week. Supporting this perspective, Minneapolis Fed President Neel Kashkari commented on Monday that he anticipates further rate reductions in the upcoming year, as reported by Reuters.
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