The Australian Dollar rallies without an Australian reason
The Australian Dollar has traded a band of barely 20 pips through the session, holding above 0.7050 and easing 0.15% inside it. That is the tightest daily range the pair has produced in weeks, and it arrives at the end of a run of close to 200 pips from the late-June trough just above 0.6850.
The Australian Dollar has experienced minimal volatility, remaining stable around 0.7050, despite a sharp decline from its June low of 0.6850. The 50-day Exponential Moving Average (EMA) has been closely tracked, now hovering just above 0.7000. Various domestic factors, including the Reserve Bank of Australia's (RBA) interest rate decision, inflation data, and export market performance, have failed to provide impetus for the currency's upward movement.
Consequently, market analysts attribute the rally to external factors, primarily the American Federal Reserve's stance on interest rates. With the Fed priced at a 49.93% probability for a quarter-point rate hike, the Australian Dollar has ridden the wave of a weaker Dollar index, which has reached its weakest level since early June.
However, the rally's foundation is fragile, as it lacks domestic support and could potentially be tested at the 0.7100 barrier. The RBA's forthcoming decision, scheduled for Tuesday at 04:30 GMT, remains the primary catalyst for the currency's movement, with the market closely monitoring its impact on the overall outlook.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.
