AUD/USD refreshes seven-week high above 0.6850 as RBA sets for further policy tightening – Crypto News – Crypto News
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Bears flex muscles to revisit 0.6850 support Bears flex muscles to revisit 0.6850 support

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AUD/USD refreshes seven-week high above 0.6850 as RBA sets for further policy tightening – Crypto News

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  • AUD/USD has been accelerated above 0.6850 amid a cheerful market mood.
  • A third consecutive 75 bps rate hike is expected from the RBA.
  • Fed’s Evans sees a higher interest rate pace but has favored a deceleration in the interest rate hike pace.

The AUD/USD pair has extended its recovery from 0.6770 to above 0.6850 in the Asian session. The Aussie asset has witnessed stellar buying interest from the market participants as the Reserve Bank of Australia (RBA) is all set to tighten its policy further for bringing price stability.

Apart from the RBA’s monetary policy, a positive market mood has also strengthened the Australian Dollar. A sheer decline in safe-haven’s appeal has dragged the US Dollar Index (DXY) to a fresh five-month low at 104.14. S&P500 futures have turned subdued as Federal Reserve (Fed) policymaker has proposed a higher interest rate peak despite a slowdown in rate pace. This has also brought a significant recovery in the 10-year US Treasury yields to near 3.53%.

Chicago Fed President Charles Evans said on Friday, “We are probably going to have a slightly higher peak to fed policy rate even as we slow pace of rate hikes,” as reported by Reuters.

On the Australian front, the RBA Governor Philip Lowe is set to hike its Official Cash Rate (OCR) further to trim the inflation rate. In October month, the Australian Consumer Price Index (CPI) dropped to 6.9% after printing a high of 7.3%. Economists at UOB Group cited that “We are penciling in another 25 basis points (bps) hike at the final monetary policy meeting of the year on 6 Dec, which will take the OCR to 3.10%. This would be the third consecutive 25 bps rate hike by the RBA.

Going forward, investors will keep an eye on Australian Gross Domestic Product (GDP) data, which will be released on Wednesday. The Australian economy is likely to deliver a decline in the growth rates to 0.7% and 1.8% on a quarterly and an annual basis.

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