The Australian dollar rises near 3% from late-June lows despite deteriorating local economic signals and no rate hike expectations.
The Australian dollar has climbed nearly 3% from its late-June low above 0.6850, trading above 0.7050 with a daily range of just 20 pips, the tightest in weeks. The 50-day Exponential Moving Average at 0.7000 now acts as support, though domestic fundamentals have weakened during the rally.
Inflation data undershot expectations, and China’s disinflation print on Sunday further reduced pressure on the Reserve Bank of Australia. A rate decision on Tuesday is widely expected to hold at 4.35%, with all 37 economists in a Reuters poll forecasting no change. Market-implied odds of a hike have fallen to low single digits.
The RBA’s quarterly Statement on Monetary Policy and a press conference will follow the decision, though no immediate policy shift is anticipated. The currency’s strength contrasts with subdued local economic signals, leaving traders focused on external factors.