AUD/USD Rebound Unravels Ahead of RBA as CPI Report Fails to Impress

Australian Dollar Talking Points

AUD/USD quickly pares the advance from the 2018-low (0.7021) as updates to Australia’s Consumer Price Index (CPI) does little to alter the monetary policy outlook, and the exchange rate remains vulnerable going into the next Reserve Bank of Australia (RBA) meeting on November 5 as the central bank looks poised to carry the record-low cash rate into 2019.

Image of daily change for major currencies

AUD/USD Rebound Unravels Ahead of RBA as CPI Report Fails to Impress

Image of daily change for audusd rate

The downtick in the headline reading for inflation should keep the RBA on the sidelines as ‘growth in household income remains low and debt levels are high,’ and Governor Philip Lowe Co. may continue to tame bets for higher borrowing-costs as ‘the low level of interest rates is continuing to support the Australian economy.’

In turn, the RBA looks poised to carry its wait-and-see approach into 2019, with the diverging paths for monetary policy casting a bearish outlook for AUD/USD as the Federal Reserve sticks to its hiking-cycle, but the weakness in the exchange rate has been largely accompanied

Article source: https://www.dailyfx.com/forex/fundamental/us_dollar_index/daily_dollar/2018/10/31/AUDUSD-Rebound-Unravels-Ahead-of-RBA-as-CPI-Report-Fails-to-Impress.html