Aussie dollar strengthens as RBA holds rates and signals cautious easing path
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Daily Currency Update
The Australian dollar (AUD) is showing strength against other major currencies after the Reserve Bank of Australia (RBA) left interest rates unchanged at 3.60% and signaled a cautious approach toward future cuts. Unlike some central banks that are leaning more dovish, the RBA noted signs that private demand is picking up, inflation may remain sticky in some areas, and the labor market remains stable. This suggests that they’re not ready to ease policy just yet. As a result, traders have pulled back expectations for a near-term rate cut. The chance of a 25-basis point cut at the next RBA meeting in November has dropped to 38%, down from 48% before the announcement. Looking further out, markets still price in just one cut over the next 12 months, with the cash rate expected to bottom near 3.35%. For retail traders, this matters because interest rate expectations are a key driver of currency moves. The RBA’s more cautious stance compared to central banks like the U.S. Federal Reserve—where markets are more confident about upcoming rate cuts—could give the Aussie dollar an edge. In other words, if Australia is set to cut rates more slowly than the U.S., the AUD/USD pair could trend higher. Add in resilient global economic activity and ongoing demand for commodities (which benefits Australia), and there's a supportive backdrop for the Aussie in the near term. For traders watching AUD/USD, the pair could see further upside as long as the RBA stays patient and inflation pressures remain in focus.Key Movers
The US Bureau of Labor Statistics has released its latest Job Openings and Labor Turnover Survey (JOLTs) data, revealing a modest increase in job vacancies across the country. The number of open positions rose to 7.227 million, slightly exceeding economists’ expectations of 7.190 million. This stronger-than-anticipated figure underscores the resilience of the US labor market and provides important insight into hiring trends and workforce dynamics. JOLTs data, collected from employers nationwide, offers a comprehensive snapshot of the current state of employment, including job openings, recruitment activity, hires, and separations. The uptick in job vacancies suggests that demand for labor remains robust, even as businesses continue to face challenges in filling available roles. From a market perspective, the stronger job openings report is generally supportive—or bullish—for the US dollar (USD). A high number of vacancies signals a tight labor market, which can drive wage growth as companies compete for scarce talent. Rising wages, in turn, can contribute to higher inflationary pressures. This dynamic raises the likelihood that the Federal Reserve may maintain or even increase interest rates to keep inflation in check, making the USD more attractive to global investors seeking higher returns. However, the data also highlights an ongoing concern for employers: the difficulty in finding qualified candidates to fill these positions. This mismatch between job openings and available workers could lead to sustained wage pressures, which may translate into higher costs for businesses and potentially broader inflationary impacts over the longer term. Overall, while the increase in job openings reflects a strong labor market, it also underscores the complex challenges ahead for policymakers balancing economic growth, inflation, and labor market health.Expected Ranges
- AUD/USD: 0.6500 - 0.6700 ▲
- AUD/EUR: 0.5500 - 0.5700 ▲
- GBP/AUD: 2.0250 - 2.0450 ▼
- AUD/NZD: 1.1300 - 1.1500 ▲
- AUD/CAD: 0.9100 - 0.9300 ▼