AUD/USD Faces Make-or-Break Week Ahead of RBA Meeting

The Australian Dollar (AUD) has been experiencing a bearish trend, falling for three consecutive weeks. The upcoming week promises to be packed with significant economic data and events that will drive early market moves. On Tuesday, the Reserve Bank of Australia (RBA) meeting is expected to hike interest rates by 25 basis points, which traders will closely watch for policy clues in the statement and press conference.

The RBA may retain the threat of further hikes without committing, as unemployment has crept up to 4.65% and CPI data due on Wednesday could rekindle expectations of another hike. Household spending is expected to have a hot report coupled with higher inflation figures, which could fuel expectations of another rate increase.

On the US front, key economic releases include PCE inflation, nonfarm payrolls, and ISM manufacturing. These data points will reassess the Federal Reserve's (Fed) rate outlook, particularly with hawkish Fed officials leaning towards further interest rate hikes. The US dollar index has reached a two-month high, sending AUD/USD to just shy of 70c.