Australian Dollar Rebounds from 2-Week Low
The Australian dollar strengthened above $0.70, recovering from a recent two-week low as a weaker US dollar and improved global risk appetite lifted demand for risk-sensitive currencies. Global markets rallied after Democratic victories in the US midterm elections boosted hopes for progress toward ending the US-Iran conflict, which also triggered a sharp decline in oil prices. In Australia, better-than-expected trade data added support, with the trade surplus widening sharply to its largest in seven months and beating expectations for a deficit. Meanwhile, the Reserve Bank of Australia's latest quarter-point rate hike to 4.85%, its fifth increase this year, continues to provide some yield support. However, a split 6—3 decision and softer policy guidance have raised expectations that the central bank could pause in December. Governor Michele Bullock stressed that further tightening remains uncertain, although persistent inflation risks leave the door open for another increase.
The Australian dollar strengthened above $0.70, recovering from a recent two-week low as a weaker US dollar and improved global risk appetite lifted demand for risk-sensitive currencies. Global markets rallied after Democratic victories in the US midterm elections boosted hopes for progress toward ending the US-Iran conflict, which also triggered a sharp decline in oil prices. In Australia, better-than-expected trade data added support, with the trade surplus widening sharply to its largest in seven months and beating expectations for a deficit.
Meanwhile, the Reserve Bank of Australia's latest quarter-point rate hike to 4.85%, its fifth increase this year, continues to provide some yield support. However, a split 6—3 decision and softer policy guidance have raised expectations that the central bank could pause in December. Governor Michele Bullock stressed that further tightening remains uncertain, although persistent inflation risks leave the door open for another increase.