AUD/USD Extends Losses as Australian inflation Eases
AUD/USD Analysis
The Reserve Bank of Australia is the notable holdout in monetary policy as it has not followed its major peers to their easing cycles. Still wary of inflation, policymakers maintained their hawkish stance at the last meeting, with Governor Bullock once again ruling out rate cuts in the near term [1]. Today's inflation data though showed further progress on the disinflation process. CPI rose by just 2.1% y/y in September and 2.8% y/y in the third quarter, both marking the slowest pace in over three years.
Despite the central bank's divergence, AUD/USD runs its fifth straight losing week and heads towards its worst month of the year. That's largely a reaction to USD strength from the Fed's cautious shift after September's jumbo cut, due to persistent inflation and strong economy and labor market. Today's inflation data from Australia will keep pressure on the RBA to cut and the pair extends its losses as a result towards the 0.6500 handle. This creates risk for a test of 0.6442, although the 2024 lows seem distant for now.
Even though headline inflation eased, services ticked up and core measures were more persistent. Although it is getting harder to maintain its hawkish stance, the RBA is unlikely to pivot at next week's meeting. At the same time, markets still expect the Fed to cut rates twice this year, despite recent reserve. The monetary policy differential can lend support to the pair in the medium term and recovery effort towards the Ichimoku Cloud would be reasonable. Moves above the EMA200 (black line) that would pause the bearish bias would need strong catalyst.
The trajectory of the pair will be determined by a slew of crucial data and events over the coming days, starting with US PCE and NFPs. Next week, both the RBA and the Fed announce their latest rate decisions.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
References
| Retrieved 14 May 2026 https://rba.livecrowdevents.tv/MediaConferenceMonetaryPolicyDecision24Sept |
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