AUD/USD Stuck in Neutral Ahead of RBA Decision

The Australian dollar has been experiencing a neutral tone in recent trading sessions, reflected in AUD/USD price action that has only seen moves of roughly 0.2% over the last two days without establishing a clear direction.

This lack of momentum is largely due to market expectations surrounding the next policy moves from both the Reserve Bank of Australia (RBA) and the Federal Reserve, with the RBA decision taking center stage today.

Markets expect another interest rate increase, with implied probabilities showing more than a 90% chance of an outcome that would see rates move from 4.35% to 4.60%, reinforcing the view that the RBA will maintain a restrictive policy stance due to inflation remaining above desired levels.