Australian Dollar stalls corrective slide from monthly high amid hawkish RBA and weak USD
The AUD/USD pair retreats after hitting a fresh monthly high on Thursday, snapping a four-day winning streak and stalling its recent goodish recovery from sub-0.6900 levels, or the lowest since early July.
The Australian Dollar (AUD) failed to continue its recent uptrend as it stalled its recovery from sub-0.6900 levels, hovering above the 0.7000 psychological barrier during the early European session. Market sentiment remained cautious amid fears of Middle Eastern tensions, prompting some profit-taking of the risk-sensitive AUD. However, hawkish remarks from Reserve Bank of Australia (RBA) officials, combined with a selling bias towards the US Dollar (USD), provided support and curbed further downside for the AUD/USD pair.
RBA Assistant Governor Christopher Kent indicated on Monday that there are plausible signs that neutral interest rates are rising both domestically and internationally. Moreover, RBA Deputy Governor Andrew Hauser cautioned that Q3 trimmed-mean inflation may exceed expectations, sustaining rate hike prospects ahead of the November 3 policy meeting. Additionally, China's unexpectedly robust third-quarter GDP growth proved another positive catalyst for the Australian currency.
Meanwhile, the USD experienced a retreat from an 18-month peak and hit a fresh three-week low as Federal Reserve (Fed) officials suggested no rush to raise rates during the upcoming October 27-28 meeting. US bond yields also continued their slide from multi-year highs, which lent support to the AUD/USD pair. Consequently, market participants are closely watching the outcome of the two-day Federal Open Market Committee (FOMC) meeting set to commence on Tuesday.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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