The AUDUSD will look to the Reserve Bank of Australia for guidance on the path ahead.
The AUD v USD has recovered from the aggressive slump seen with the initial tariff shock in global markets. The 0.65 level is now resistance for further gains and price needs to hold above the 0.6360 level.
CommSec bank’s Tom Piotrowski said the consensus is that the Reserve Bank of Australia will cut interest rates by a quarter of a percent.
“That’s in terms of the markets’ pricing at least – there are some intellectual arguments that would hold different positions. But nonetheless, that’s what the markets are expecting,” he said on Sky News.
The Reserve Bank of Australia could still surprise markets at its policy meeting on Tuesday, despite widespread expectations for a rate cut. With tariff issues increasing global uncertainty, predictions are varied, with some predicting a large cut, while others expect no move.
The bank’s rate decision will come at 12:30pm HKT, with the press conference set for 13:30pm. The Aussie dollar has gained with other global currencies after the Moody’s downgrade of US debt due to deficits and spending.
The Australian economy is not in great health either, after recording almost the worst productivity performance in the developed world. The Productivity Commission is investigating whether the country’s 30% company tax rate should be lowered to drive higher productivity in the workforce.
US Treasury Scott Bessent played down the recent US debt downgrade, saying it was “a lagging indicator”.
Speaking on CNN, he blamed the prior administration of Joe Biden.
“We didn’t get here in the past 100 days,” he said. “It’s the Biden administration and the spending that we have seen over the past four years that we inherited, 6.7 percent deficit-to-GDP, the highest when we weren’t in a recession, not in a war”.
