Australian Dollar Stays Quiet as Traders Wait for RBA Decision
The Australian dollar (AUD) is moving very little against the US dollar (USD) as traders stay cautious ahead of the Reserve Bank of Australia (RBA) meeting this week.
Markets expect the RBA could cut interest rates by 25 basis points, bringing the cash rate down from 3.85% to 3.60%. This follows recent data showing that core inflation slowed to 2.7% in June, now well inside the bank’s target range of 2–3%.
Other numbers are also cooling. Unemployment is creeping higher, and wage growth has lost momentum, signaling the economy is slowing. These factors add pressure on the RBA to act.
RBA Governor Michele Bullock recently said the central bank will no longer give forward guidance. That means traders will get no early hints about future moves, making each meeting more unpredictable and increasing market tension.
Meanwhile, China’s economy—the biggest customer for Australian exports—is facing its own problems. Consumer prices in July showed no growth, and producer prices kept falling. Weak demand from China could hit Australian trade and weigh on the Aussie dollar.
At the moment, AUD/USD is hovering near 0.6520, holding just above its nine-day moving average.
Impact:
* A rate cut could weaken the Aussie, pushing AUD/USD lower.
* Slowing growth in China may add more selling pressure on the AUD in the coming weeks.
