AUD/USD moves higher to near 0.6600 amid easing RBA dovish bets.
Traders pare Fed dovish bets as inflation proves to be persistent.
Cooling US job demand has boosted Fed dovish bets.
The AUD/USD pair gains slightly to near 0.6605 during the European trading session on Friday. The Aussie pair moves higher as the Australian Dollar (AUD) gains amid easing bets supporting interest rate cuts by the Reserve Bank of Australia (RBA) in the policy meeting in November.
According to a Reuters report, Futures now imply around a 45% chance that the RBA will cut its Official Cash Rate (OCR) by 25 basis points (bps) in the November policy meeting.
RBA dovish bets have eased as inflationary pressures in the Australian economy are proving to be persistent. “Components of the monthly CPI are a little higher than expected, and inflation is not running away,” RBA Governor Michele Bullock said at a post-meeting press conference in late September.
Analysts at ANZ have also dropped their view of interest rate cut by the RBA in the policy meeting next month.
Meanwhile, the US Dollar (USD) remains on the back foot amid United States (US) government shutdown and weakening job market. Partial US government closure has resulted in a halt of key economic data releases, including Nonfarm Payrolls (NFP) for September that was scheduled to release on Friday.
Cooling US job demand has boosted speculation for more interest rate cuts by the Federal Reserve (Fed) in the remainder of the year.
According to the CME FedWatch tool, traders have almost fully priced in a 25 basis points (bps) interest rate reduction by the Fed in the policy meeting later this month. Traders also see an 87% chance that the Fed will also cut interest rates by a similar size in the December meeting.
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