AUDUSD takes a sell dive amidst the RBA rate. The pair has been subject to significant fluctuations in recent trading sessions, driven by a combination of factors. These factors include the Reserve Bank of Australia’s (RBA) policy decisions, global geopolitical tensions, and the upcoming US economic report.
The AUDUSD experienced a substantial decline on Monday, erasing gains from the previous week. This downward movement, nearing the 0.6600 market level, raises concerns about the RBA’s ability to maintain interest rates. Investors closely monitor RBA Governor Michele Bullock’s press conference for forward guidance.
Impact of the RBA Statement
The RBA’s rate statement holds significant influence over the market. Investors may carefully weigh the potential impact of additional rate hikes on the Australian economy. Striking the right balance is crucial for the RBA, as both excessive rate hikes and insufficient action could have adverse effects. Excessive hikes may destabilize the economy, while insufficient action could fuel inflation beyond consumer expectations.
key US economic reports anticipated for the week, such as ISM Services PMI, and ADP Employment Change. The others also include November Nonfarm Payrolls, and the unemployment rate, as they will shape the trajectory of the US dollar in the short term.
The trajectory of the US dollar will be influenced by this week’s labor market data, shaping expectations and directing the Fed’s policy direction. Additionally, the USD’s uptick aligns with increasing US bond yields, with various yield rates, including the 2, 5, and 10-year rates, being noted.
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