Today's AUD Prices & Core PCE in Conflict!

The AUD price today halted its five-day winning streak, which began last week, due to the weakening US Dollar (USD). The AUD/USD currency pair strengthened as the likelihood of a higher interest rate hike by the Reserve Bank of Australia (RBA) increased. This development can be linked to rising inflation expectations triggered by increasing oil prices.

Australia is likely to experience strong commodity price increases due to the ongoing conflict in the Middle East. Additionally, Westpac Consumer Confidence Index data for October showed increased individual confidence during the same period.

Australia's economic condition showed resilience in September, despite a slowdown in inflation. Moreover, Consumer Sentiment improved in October, although interest rates remained unchanged, but concerns about rising living costs still overshadowed overall sentiment.

Christopher Kent, Assistant Governor (Financial Markets) of the Reserve Bank of Australia (RBA), gave a speech at an event in Sydney organized by Bloomberg on Wednesday.

Kent highlighted the opportunity to observe how the economy will respond to previous interest rate increases. Currently, there is no intention to accelerate the pace of bond holdings reduction. If bond sales occur, the approach will be very cautious to avoid disrupting market stability.

Kent also noted examples of rapid wage growth in certain sectors, although the overall impact remains controlled. While acknowledging the importance of Consumer Price Index (CPI) data, Kent emphasized that this data is not the sole factor influencing policy considerations.

The US Dollar Index (DXY) continued to weaken, extending the downtrend that began last week. The US Dollar (USD) faces challenges, despite a slight recovery in US bond yields on Tuesday.

Additionally, a series of dovish comments from Federal Reserve (The Fed) policymakers emerged in the market, with many expressing concerns that rising long-term US bond yields might hinder their willingness to raise interest rates in the next meeting.

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Warning!

This analysis is based on fundamental and technical views from reliable sources and is not intended as advice or solicitation. Always remember that this content is designed to enrich readers' information. Always conduct your own independent research on other forex-related information as a reference for your trading.

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