AUD/USD Remains Confined Below 0.6570, Focus on RBA’s Bullock Speech
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■ AUD/USD remains sideways near 0.6565 on the stronger USD.
■ The FOMC meeting begins its two-day meeting on Tuesday, with no change expected.
■ The ANZ-Roy Morgan Australian Consumer Confidence weekly survey came in at 80.8 vs. 76.4 prior.
■ RBA’s Bullock speech and US CPI report on Tuesday will be in focus.
The AUD/USD pair remains confined in a tight range of 0.6550-0.6575 during the early Asian session on Tuesday. A firmer US Dollar (USD) weighs on investor appetites and creates headwinds for the pair. At press time, AUD/USD is trading around 0.6565, down 0.02% for the day.
The Federal Open Market Committee (FOMC) meeting begins its two-day meeting on Tuesday, with no change expected. Market players will take cues from the statement on when rate cutting could start next year. According to the CME FedWatch Tool, the markets have priced in that FOMC to hold the rate steady at 5.25%–5.50% at its December meeting and pricing in a 25 basis point (bos) rate cut as early as March next year.
The focus on Tuesday will be the US November's Consumer Price Index (CPI) report, which could offer some hints about further monetary policy paths. The monthly inflation figure is expected to rise by 0.1% MoM, while the annual rate is estimated to ease from 3.2% to 3.1%. Finally, the annual core inflation figure is projected to remain at 4.0%.
On the other hand, the Reserva Bank of Australia (RBA) left the official cash rate steady at 4.35% last week, but opened the door for additional rate hikes if inflation remains sticky. Consumer confidence in Australia improved to its highest since February following a decision by the RBA to hold rates. The ANZ-Roy Morgan Australian Consumer Confidence weekly survey for the week came in at 80.8 from the previous week's 76.4.
The RBA Governor Michele Bullock is set to speak at an event in Tuesday’s Asian session. Traders will also keep an eye on the Australia Westpac Consumer Confidence survey and the National Australia Bank's Business report. On the US docket, the US CPI and FOMC meeting will be in the spotlight. These events could give a clear direction to the AUD/USD pair.
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