AUD/USD loses its recovery momentum below 0.6560 ahead of RBA’s Bullock speech
- AUD/USD loses traction around the mid-0.6500s in early Wednesday.
- The FOMC showed members agreed policy to remain at a restrictive stance for some time until inflation moves down toward the objective.
- The November RBA Board meeting showed a hawkish tone with a focus on risk management along with a data-dependent approach.
- Market players will focus on the Australian Westpac Leading Index for October ahead of the RBA’s Bullock speech.
The AUD/USD pair trades in the negative territory for the second consecutive day during the early Asian session on Wednesday. AUD/USD loses its recovery momentum despite the modestly hawkish Reserve Bank of Australia (RBA) meeting minutes, retreating from 0.6590. The pair currently trades near 0.6553, losing 0.04% on the day.
The Federal Open Market Committee (FOMC) Meeting Minutes showed that participants acknowledged monetary policy should be tightened further if incoming data suggested that progress toward the Committee’s inflation target was insufficient. Additionally, all participants agreed it was appropriate to “maintain” the current rate-setting until inflation is clearly moving down to the Fed’s target.
On Tuesday, the October Chicago Fed National Activity Index fell to -0.49 versus -0.02 prior, the lowest monthly reading since March. Elsewhere, US Existing Home Sales dropped 4.1% MoM from a 2.2% decline in September.
On the Aussie front, the November Reserve Bank of Australia (RBA) Board meeting showed a hawkish tone with a focus on risk management along with a data-dependent approach. The markets anticipate that the RBA will hold the cash rate until February before another hike, albeit risks remain skewed to the upside.
Looking ahead, market participants will keep an eye on the Australian Westpac Leading Index for October and RBA Governor Bullock is set to speak again later on Wednesday. In the American session, the attention will shift to US Jobless Claims, Durable Goods Orders, and the University of Michigan Consumer Sentiment survey.