AUD on Thin Ice Ahead of RBA Decision
The Australian dollar has been on shaky ground lately, but this week promises to be pivotal for its future. Last week saw US yields surge to multi-decade highs due to sticky inflation and rising oil prices.
This led to the AUD falling against its G10 peers, with a notable drop against the Japanese yen, down 1.1% to trade near 110.70 on Monday. Meanwhile, the AUD/NZD pair began the week at fresh 13-year highs near 1.2491 before experiencing a pullback.
The Reserve Bank of Australia (RBA) is set to hold its policy meeting on Tuesday, with markets expecting a 25-basis-point rate hike ahead of Wednesday's Consumer Price Index (CPI) release. This decision will be closely watched for clues on future interest rates and whether further hikes remain on the table.
Additionally, the US nonfarm payrolls data for September will also be closely monitored. With labour market conditions remaining healthy, but showing signs of easing, investors are looking to this release for further insight into the job market's trajectory.