Australian Dollar to US Dollar (AUD/USD) Exchange Rate Forecast to Decline as RBA Contemplates Rate Cut

  • Posted on

One Hundred United States Dollars (USD)

The Australian Dollar to US Dollar (AUD/USD) exchange rate softened by around -0.44%.

In the wake of minutes from the Reserve Bank of Australia’s (RBA) most recent policy meeting which indicated that policymakers were flirting with the idea of cutting the benchmark interest rate, the ‘Aussie’ (AUD) softened versus the majority of its most traded currency rivals. Rapidly declining crude prices also weighed on market sentiment which caused dampened demand for high-yielding assets.

The US Dollar, meanwhile, softened versus many of its most traded currency peers as a result of trader reluctance to invest ahead of the Federal Open Market Committee (FOMC) meeting. Although most traders do not expect the Federal Reserve to change the benchmark rate, there is potential for a change in rhetoric to a more hawkish policy outlook.

The Australian Dollar to US Dollar (AUD/USD) exchange rate is currently trending in the region of 0.7609.

Australian Dollar (AUD) Exchange Rate Softens on RBA

Minutes from the most recent RBA policy meeting indicated that policymakers were willing to cut the benchmark rate further despite pressure in the housing market. This saw the ‘Aussie’ dive versus most of its major peers.

‘In considering whether or not to reduce the cash rate further at this meeting, members saw benefit in allowing some time for the structure of interest rates and the economy to adjust to the earlier change,’ the RBA said in its minutes. ‘They also saw advantages in receiving more data to indicate whether or not the economy was on the previously forecast path.’

The bank concludes with: ‘Taking account of all these factors, members judged it appropriate to hold the cash rate steady for the time being, while recognising that further easing over the period ahead may be appropriate to foster sustainable growth in demand while maintaining inflation consistent with the target.’

The Australian Dollar to US Dollar (AUD/USD) exchange rate has fallen to a low today of 0.7601.

US Dollar (USD) Exchange Rate Dips ahead of FOMC

With the Federal Reserve policy decision fast approaching, the US Dollar softened amid reluctance to invest. Should the Fed continue using tired rhetoric like ‘patience’, the US Dollar is likely to plummet across the board. Mixed data which errs toward negativity also weighed on demand for the ‘Greenback’ (USD).

‘Our view is that the US economy’s actually doing well, definitely the best economy in the world and the unemployment data is at quite low levels,’ said Gavin Goodhand, a senior portfolio manager at fixed income investor. ‘The US Fed is really on the cusp of changing its guidance and then looking to move rates higher. The first thing they’re going to do – and they’ve telegraphed to the market – is remove the word ‘patient’ and I wouldn’t be surprised.’

Australian Dollar to US Dollar (AUD/USD) Exchange Rate Forecast to Fluctuate

With fluctuations in commodities driving changes for the ‘Aussie’, and with divided opinion as to the hawkishness of Fed policymakers, the Australian Dollar to US Dollar (AUD/USD) exchange rate is likely to fluctuate over the coming days.

The Australian Dollar to US Dollar (AUID/USD) exchange rate climbed to a high today of 0.7665.

« Previous Story

Australian Dollar to US Dollar (AUD/USD) Exchange Rate Forecast to Fluctuate on RBA Minutes and FOMC Announcement

Next Story »

Australian Dollar to US Dollar (AUD/USD) Exchange Rate Forecast: FOMC Interest Rate Announcement to Shake Market

Disclaimer: and its data provider, TorFX, make no claims regarding the validity or exactness of the information provided in on this site and will not be held liable for any use, interpretation, or other implementation of the information provided. make no warranties, express or implied, as to results to be obtained from use of such information, and make no express or implied warranties of condition, quality, performance, merchantability or fitness for a particular purpose or use. shall not have any liability for the accuracy of the information contained in the services provided or ommissions there in which are made available on a free, as-is basis. None of the aforementioned parties shall be liable for any third party claims or losses of any nature, including, but not limited to, lost profits, punitive, consequential, special, incidental, indirect or similar damages even if advised of the possibility of such damages. Rates offered are interbank rates and may not be the same as offered by your financial institution, and do not include commissions. Rates shown on this site will vary from those provided by TorFX or other providers linked to from this site.