Australian Dollar Stalls After 3-Day Rally Awaiting Central Bank Signals

The Australian dollar paused its three-day rally, stabilizing near the $0.70 mark. Investors are now focusing on key updates from central banks to gauge future policy directions. The Federal Reserve is set to release minutes from its September meeting this week, with markets assigning an 80% probability that rates will remain unchanged in October following a weak labor report.

Support for the Australian dollar came as the US dollar weakened broadly, particularly against the euro, amid easing stress in European bond markets. Meanwhile, consumer sentiment in Australia declined for the second consecutive month in October, as rising borrowing costs and cost-of-living pressures weighed on households.

Markets currently predict a 75.7% chance that the Reserve Bank of Australia (RBA) will keep rates steady in November, with a 24.3% chance of another rate hike. Next week, attention will shift to the RBA’s meeting minutes for additional policy signals.