AUD Steadies Ahead of RBA Decision Amid Elevated US Yields

The Australian Dollar (AUD) has stabilized around 0.7020 on Monday as expectations of further monetary tightening from the Reserve Bank of Australia (RBA) offset firm US yields.

The RBA is expected to raise its Official Cash Rate (OCR) by 25 basis points, from 4.35% to 4.60%, at its meeting on Tuesday, marking the central bank's fourth rate hike this year.

This move would take Australia's benchmark interest rate to its highest level in 15 years, but markets are already largely pricing in a 25-basis-point increase, suggesting that the decision itself may have a limited impact on the AUD.

The US Dollar retains some support from elevated US Treasury yields, and expectations of another Federal Reserve (Fed) rate hike are limiting gains in AUD/USD despite the more restrictive outlook for the RBA.