- AUD/USD is losing momentum around mid-0.6500s early Wednesday.
- The FOMC indicated that members agreed on a policy to remain in a restrictive stance for some time until inflation moves toward the target.
- The RBA board meeting in November showed a hawkish tone with a focus on risk management alongside a data-driven approach.
- Market participants will focus on Australia’s Westpac Leading Index for October ahead of Bullock’s RBA speech.
The AUD/USD pair is trading in negative territory for the second day in a row during the early Asian session on Wednesday. AUD/USD is losing recovery momentum despite a modestly hawkish Reserve Bank of Australia (RBA) meeting minutes, falling from 0.6590. The pair is currently trading near 0.6553, losing 0.04% on the day.
Minutes from the Federal Open Market Committee (FOMC) meeting showed that participants agreed that monetary policy should be tightened further if incoming data indicate that progress toward the committee’s inflation target is insufficient. In addition, all parties agreed that it was appropriate to “keep” the current setting of rates until inflation clearly fell to the Fed’s target.
Tuesday October Chicago Fed The National Activity Index fell to -0.49 from -0.02 earlier, the lowest monthly reading since March. Elsewhere, US existing home sales fell 4.1% month-on-month from a 2.2% drop in September.
On Australian November’s Reserve Bank of Australia (RBA) board meeting showed a hawkish tone up front with a focus on risk management alongside a data-driven approach. Markets expect the RBA to hold the cash rate until February before raising it further, although risks remain skewed to the upside.
Looking ahead, market participants will be watching Australia’s Westpac Leading Index for October and RBA Governor Bullock will speak again later on Wednesday. In the US session, the focus will shift to US Jobless Claims, Durable Goods Orders and the University of Michigan Consumer Sentiment Survey.