FxNews—On Monday, the Australian dollar fell below $0.66, reaching its lowest point since mid-August, trading at approximately $0.658 as of this writing.
AUD/USD Falls Amid Strong Dollar and Rising Treasury Yields
The decline in the AUD/USD was influenced by a strong US dollar and rising Treasury yields, driven by evidence of a strong US economy and speculation that former President Donald Trump might run for a second term.
At the same time, the Australian dollar gained strength against the Japanese yen following a significant political shift in Japan where the ruling coalition lost its majority, potentially delaying any interest rate hikes by the Bank of Japan.
RBA Expected to Hold Rates Steady Amid Inflation Focus
In Australia, investors are waiting cautiously for this week’s inflation data, which could impact the Reserve Bank of Australia’s (RBA) decisions regarding monetary policy. The RBA has maintained the cash rate at 4.35%, considering it sufficient to reduce inflation to its target of 2%- 3% while also supporting job growth.
The market does not anticipate any changes to this policy for the rest of the year, with expectations of a possible rate cut not seen until May of the following year.