AUD Rises, Will RBA Cut Be Cancelled?
The Australian dollar (AUD) strengthened slightly to around $0.661 on Tuesday, marking its third consecutive session of gains. This strengthening occurred as markets began to reduce expectations for a near-term interest rate cut by the Reserve Bank of Australia (RBA). RBA Governor Michele Bullock signaled that interest rates would likely remain unchanged, as continued strong consumer spending and rising inflation—particularly in housing and services—made a rate cut less urgent.
Market expectations are now more subdued. Investors only price in a 40% chance of a 25 basis point cut in November, down significantly from the near certainty a month ago. This means the window for an imminent rate cut is narrowing, providing additional support for the AUD.
Data-wise, the Westpac-Melbourne Institute consumer sentiment index fell 3.5% month-on-month to 92.1 in October—the deepest decline since April—reflecting household concerns about persistent inflation. In the labor market, ANZ-Indeed Job Advertisements fell 3.3% in September, the third consecutive decline and the sharpest since February 2024. The combination of weakening sentiment and declining job advertisements acted as a brake on growth prospects, although the AUD was temporarily helped by expectations of tighter-than-expected RBA policy.
Source: Newsmaker.id
