The Australian Dollar (AUD) struggled to gain momentum amidst cautious trading activity ahead of the Reserve Bank of Australia’s (RBA) decision to keep policy rates unchanged at 4.35%. RBA Governor Michele Bullock noted progress in combating inflation but warned of risks to the economic outlook, emphasizing the need for close monitoring of employment figures. The Australian S&P/ASX 200 Index experienced muted trading, with gains in energy and real estate sectors potentially supporting the AUD.
Meanwhile, the US Dollar strengthened as US Treasury yields rose, driven by expectations of a hawkish stance from the Federal Reserve. Market participants adjusted their rate cut expectations following positive economic data, leading to increased demand for the greenback. Investors are eagerly awaiting upcoming interest rate decisions from the People’s Bank of China (PBoC) and the Fed. The AUD/USD pair remains near the key level of 0.6550, with potential downside support at 0.6528 and 0.6500, while resistance levels are seen at 0.6571 and 0.6600. The AUD’s performance against major currencies was mixed, with the USD emerging as a strong contender against the Australian Dollar.