On Tuesday, the Aussie dollar rose versus the greenback. This happened because people now think Australia’s central bank won’t lower interest rates anytime soon. Trading settled near 0.6560—a two-day winning streak for the pair.
Expectations for lower interest rates have plummeted following comments from Australia’s central bank governor that the job market is strong, despite a slight increase in unemployment.
Traders now expect only a slim chance of a rate cut when the bank meets next week, and all eyes are on upcoming inflation figures, which are expected to provide clues for future borrowing-cost decisions. Moreover, global markets are positive due to news of reduced tensions between the US and China.
The dollar fell near 98.70 as investors expected the Federal Reserve to reduce interest rates by a quarter percent this week. Most traders have this notion that rates will fall in October, followed by another decrease in December.
AUD/USD stays strong over 0.6550, and should it climb beyond 0.6600, prices might start to rise.
