Australian Dollar: RBA hike unlikely to provide much support, says TD Securities

With an 80% probability of a November RBA rate hike already priced in, scope for additional support for the Australian Dollar is limited, according to TD Securities FX strategist Howard Du. Softer sentiment towards global equities has kept AUD/USD below its 200-day SMA. A broad-based USD sell-off after the US midterm elections could, however, enable the pair to move above this key technical level.

AUD Faces Limited Upside as Cross Outlook Remains Bearish

"The market currently prices around an 80% chance of a November RBA rate hike."

"Unlike central bank rate hike pricing elsewhere in the world, the market is hesitant to price in more RBA rate hikes in the coming months, in line with our call."

"With the market already pricing in another RBA rate hike in the near term, we would not expect the central bank decision to lend much further support for the AUD."

"AUD/USD has been trading below the 200d SMA for the past month due to softening global equity sentiment."

"A break above the key level is more likely if the USD could see a broad-based relief selloff after the US midterm election."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)