Australian Dollar Extends Decline Amid Risk-off Sentiment
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The Australian dollar (AUD) extended its decline for the second straight session on Monday (28/10). However, aggressive comments from the Reserve Bank of Australia (RBA) could limit further declines for the AUD/USD pair. Traders are cautious as they await key domestic inflation data due on Wednesday, which could influence the RBA’s monetary policy outlook.
The Reserve Bank of Australia noted that the current cash rate of 4.35% is sufficiently capped to bring inflation within its 2%-3% target range while supporting employment. As a result, the RBA is unlikely to consider a rate cut as soon as next month.
The US dollar (USD) strengthened as recent positive economic data from the United States (US) has fueled expectations for a more cautious stance from the Federal Reserve (Fed) in November. According to the CME FedWatch Tool, there is a 92.8% chance that the Fed will cut rates by 25 basis points in November, with no expectations for a larger cut of 50 basis points.
Source: FXStreet
