AUD/USD steadies near 0.6870 ahead of key macro events in US
- Annual CPI in Australia ticked up to 1.7% in Q3 as expected.
- FOMC is expected to announce a 25 bps rate cut.
- US Dollar Index edges lower toward 97.50 ahead of key events.
The AUD/USD pair continued to push higher for the third straight day on Wednesday and touched its highest level in eight days at 0.6876. With the trading action turning subdued ahead of today's key macroeconomic events from the United States, the pair is clinging to modest daily gains near 0.6870.
The data published by the Australian Bureau of Statistics showed that inflation, as measured by the Consumer Price Index (CPI), in the third quarter ticked up to 1.7% from 1.6% on a yearly basis as expected and failed to have a significant impact on the AUD's market valuation.
Commenting on the data and the Reserve Bank of Australia's potential reaction to it, "The number gives it some flexibility around the timing of the next rate cut; and a move next week is materially less than a 50% probability in our view," said ANZ analysts. "However, we still think the RBA will eventually need to ease further if it is to drive spare capacity out of the labour market and get the unemployment rate down towards 4.5%.”
Attention shifts to FOMC
Later in the day, participants will be paying close attention to the first estimate of the third-quarter Gross Domestic Product (GDP) data from the United States. More importantly, the Federal Reserve will be announcing the interest rate decision and releasing the monetary policy statement. Federal Open Market Committee (FOMC) Chairman Jerome Powell will be delivering his comments on the policy outlook as well.
Technical levels to watch for