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AUD steadies near 0.7000 as RBA rate decision approaches

Rabobank Research expects the RBA to deliver a 25 basis point hike, lifting the cash rate to 4.6% and providing support for the Australian dollar.

Reported · Written up by our desk · Major Pairs

FXStreet reported that the Australian dollar was holding around 0.7000 at the start of the week, after trading near its lowest level since August 4, as a stronger US dollar weighed on the pair.

The outlet said US yields were staying near multi-year highs due to inflation risks tied to higher oil prices and rising expectations for an October Fed rate hike, while the US-Iran standoff also continued to support the safe-haven dollar and pressure AUD.

FXStreet also highlighted Rabobank Research Global Economics & Markets’ view that the Reserve Bank of Australia must set policy amid strong construction growth, with historical parallels to past periods of oil shock-driven inflation.

According to the same account, Rabobank Research expects a 25 basis point rate hike to take the RBA’s official cash rate to 4.6%, which it said could help support the Australian dollar.

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