FX Empire – Australia Consumer Inflation Expectations
The RBA cut the cash rate by 25 basis points to 3.6% on August 12 as inflation continued to soften.
AMP Head of Investment Strategy and Chief Economist Shane Oliver signaled further RBA rate cuts, stating:
“We continue to see the RBA cutting rates again in November, February and May taking the cash rate down to 2.85%.”
AUD/USD: Key Scenarios to Watch
Bearish AUD/USD Scenario: Softer consumer inflation expectations or dovish RBA rhetoric. These factors could push AUD/USD below the 50-day EMA, potentially exposing the 200-day EMA.
Bullish AUD/USD Scenario: Hotter consumer inflation expectations or hawkish RBA signals. These factors could send AUD/USD toward the $0.6550 resistance level.
Explore our full AUD/USD analysis, including key trends and trade data, here.
AUD/USD Daily Outlook: Fed Policy Signals and Rate Differentials
Later today, Fed speakers will be in focus ahead of the Jackson Hole Symposium. Recent US economic data have gyrated Fed rate cut bets and US-Aussie rate differentials.
Hawkish Fed rhetoric, supporting a delay to interest rate cuts, would widen the rate differential in favor of the US dollar. Widening rate differentials could drag AUD/USD below the 50-day EMA. A drop below the 50-day EMA may pave the way to the 200-day EMA and the $0.64500 support level.
Conversely, rising support for a September Fed rate cut and further policy easing in Q4 would narrow the rate differential. Under this scenario, AUD/USD could move toward the $0.6550 resistance level.
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