Australian Dollar holds gains above 0.6950 as Fed hike bets fade, Chinese data loom

The Australian Dollar (AUD) shows gains above 0.6950 as the Federal Reserve (Fed) rate hike expectations wane, awaiting Chinese economic data on Monday. Fed officials' remarks suggesting no urgency to tighten policy helped stabilize yields and weaken the US Dollar (USD). Fed Chairman Kevin Warsh spoke at the IMF event on Friday, stating there is no prejudice on interest-rate decisions, leaving nearly 83.9% chance for a rate hold at the October 27-28 meeting.

The Reserve Bank of Australia (RBA) Assistant Governor Chris Kent expressed confidence that neutral rates are rising globally, questioning the sufficiency of current policy. Traders anticipate Chinese GDP, Industrial Production, and Retail Sales data to boost the AUD, as China is a crucial trading partner for Australia. Historically, AUD/USD ranged between 0.6935 and 0.7020, but recent declines have lowered the range, with the pair breaking below 0.6935.

While the bias leans downside, a breach of 0.6980 might suggest range-trading rather than further decline. Fed Chair Warsh's moderate yet cautious speech, with a 5.6/10 FXS Speechtracker score lower than the 6.1/10 historical average, indicates a more data-dependent and risk-aware approach.