Today, the AUD continues to decline in value during the second session, hovering around a key level on Wednesday. The AUD/USD currency pair faces downward pressure due to weak economic data from Australia and the strengthening of the US Dollar (USD) ahead of the Federal Open Market Committee (FOMC) policy decision.
 
Economic data from Australia released on Wednesday, such as the AiG Industry Index and Monthly Building Permits for September, showed a decline. However, the Australian Dollar strengthened on Monday, driven by strong Retail Sales that surprised the market with higher figures for September.
 
The Reserve Bank of Australia (RBA) is set to announce its monetary policy on November 7. Current expectations lean towards a 25 basis point interest rate hike in the upcoming meeting, triggered by high inflation rates.
 
The Caixin Manufacturing Purchasing Managers’ Index (PMI) from China unexpectedly declined in October, as indicated by the latest data released on Wednesday. The bleak performance of China’s Manufacturing PMI adds pressure on the Australian Dollar.
 
In its annual assessment, the International Monetary Fund (IMF) highlighted the resilience of Australia’s economy, although inflation continues to be a challenging issue. The IMF stated that the RBA should consider tighter policy measures. Despite the Australian economy recovering well post-pandemic, it is currently experiencing a slowdown but still shows resilience.
 
The US Dollar Index (DXY) has continued to strengthen for two consecutive days, driven by rising US Treasury yields, as the market prepares for the upcoming Federal Reserve (Fed) policy decision.
 
While the current hope is that the central bank will likely maintain its monetary policy in Wednesday's meeting, the possibility of a December meeting will depend on the available data.
 
Investors are ready to pay attention to the messages from the Federal Open Market Committee (FOMC) after the meeting, looking for important clues in assessing potential interest rate changes.
Warning!
 
This analysis is based on fundamental and technical insights from reliable sources and does not constitute advice or solicitation. Always remember that this content aims to enrich readers' information. Always conduct your own research regarding other forex information as a reference for your trading.
 
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