Aussie Dollar Cautious as RBA Hike Bets Swirl

AUD

The Aussie Dollar opens mixed against the majors this morning as markets anticipate tomorrow afternoon’s RBA rate decision. Asian equities finished the week mixed, as the Kospi fell 3.5% and the Nikkei 2.1%, while the ASX edged up 0.2%. The RBA is widely tipped to raise the cash rate tomorrow by 25bps to 4.85%, as markets now price in an 80% chance of an interest rate increase at the upcoming meeting, compared with 60% before last week’s inflation data was released. Across Asia, the Bank of Japan met last Friday and kept rates steady and signalled that a hike could be coming as soon as December for Japan. Some minor data out locally today with MI Inflation Gauge m/m, Building Approvals m/m and ANZ Job Advertisements m/m.

USD

AUDUSD opens the week flat at a rate of 0.7027 as the US stock market struggles through another AI stock sell-off and the ripple effects of the Binance hack. Wall St ended the week lower, with the Nasdaq falling 2.9%, the S&P 500 1.8% and the Dow Jones 1.1%. Late Friday night the US Employment Cost Index q/q printed as expected at 0.8% (prev 0.9%), while the Chicago PMI for October saw a retraction to print at 55.3 (exp 56.0) from a previous 58.8. Some more manufacturing data out tonight for the US, with ISM Manufacturing PMI, ISM Manufacturing Prices and Final Manufacturing PMI data set for release, with ISM Manufacturing PMI expected to edge up to 54.7 from 54.5, while ISM Manufacturing Prices and Final Manufacturing PMI are expected to remain broadly flat.
 

EUR

AUDEUR opens in the green at 0.6301 as the Euro remains under pressure due to French and European political and fiscal stress. European equities closed mixed with the DAX and CAC coming in at -0.9% and 0.0% respectively. Friday evening saw the release of German Prelim CPI m/m and German Prelim GDP q/q with CPI data showing some easing at -0.2% (exp +0.1%) from a previous +0.6% and German GDP increasing slightly at +0.2% (exp +0.1%) from a previous +0.3%. German Retail Sales m/m out later today along with a flurry of Eurozone manufacturing data.
 

GBP

AUDGBP opens flat at 0.5251 as markets await the results of this Thursday’s Bank of England interest rate decision. UK equities saw a slight bump with the FTSE up 0.1%. The Bank of England is widely expected to raise interest rates a quarter point to 4 per cent at its November 5 meeting. The commentary by BOE Gov Bailey following will be of interest to market participants to see if any clues are provided for future meetings. Final Manufacturing PMI out later tonight, currently expected to remain stagnant at 52.8.
 

NZD

AUDNZD opens slightly higher at 1.2482 as the currency pair is still reeling from last week’s shock hold from the RBNZ. A quiet start to the week data-wise out of New Zealand with the main event coming this Wednesday with the release of their employment data.