Solid Gold Berjangka – The AUD/USD pair saw a slight correction after touching a one-month high during Monday’s trading. Despite the pressure, the pair managed to hold above the psychological 0.7000 level throughout the Asian session on Monday (October 26), indicating that the Australian dollar retains solid fundamental support.
The "Aussie" continues to be bolstered by growing expectations of an interest rate hike by the Reserve Bank of Australia (RBA) at its November meeting. RBA Assistant Governor Sarah Hunter noted that inflation is not yet fully under control, leaving open the possibility of further rate hikes should price pressures from abroad become more deeply entrenched in the domestic economy.
Meanwhile, the US dollar is struggling to extend its recovery from a three-week low. Hopes for an easing of tensions in the Middle East, combined with a continued decline in US government bond yields, have capped the greenback’s gains—indirectly helping the AUD/USD pair maintain its position above the 0.7000 mark.
Investors are now awaiting Australian consumer inflation data and the outcome of the FOMC meeting on Wednesday for clearer direction. Inflation figures that exceed expectations could strengthen the case for an RBA rate hike, while policy signals from the Federal Reserve will be a primary driver for the US dollar.
Market focus will also shift toward the preliminary US third-quarter GDP data and the Personal Consumption Expenditures (PCE) price index, due on Thursday. At the same time, geopolitical uncertainty could still drive demand for the US dollar as a safe-haven asset. From a technical perspective, the movement of the AUD/USD pair around its 100-day moving average serves as a critical zone for determining whether the short-term uptrend can be sustained. (srh)