AUD/USD at 70c Ahead of RBA Meeting and CPI Data

The Australian dollar (AUD) has been under pressure in recent weeks, falling for a third consecutive week to just shy of 70 cents against the US dollar. The upcoming Reserve Bank of Australia (RBA) meeting and Consumer Price Index (CPI) data are expected to drive early moves in the AUD/USD exchange rate.

With a hawkish RBA commentary last week, market expectations are for a 25 basis point hike at the meeting. However, the recent employment report showed a reduction of 6.3k full-time jobs and a headline unemployment rate that could have been rounded up to 4.7% instead of 4.65%. This may temper the RBA's decision to signal further hikes.

Looking ahead to US data, PCE inflation, nonfarm payrolls, and ISM manufacturing will be closely watched by traders as they reassess the Federal Reserve (Fed) rate outlook. With Fed officials leaning hawkish and September's flash PMI showing business activity at a 5-year high, the US dollar index has reached a two-month high.