The AUD/USD pair plunges below the key support of 0.6400 in Tuesday’s European session. The Aussie pair weakens as Reserve Bank of Australia (RBA) Governor Michele Bullock delivered a less-hawkish interest rate guidance after leaving its key Official Cash Rate (OCR) unchanged at 4.35% for the ninth meeting in a row.Michele Bullock remained slightly confident about inflation returning to the bank’s target of 2%. “Upside inflation risks had eased but not gone away,” Bullock said. When asked about whether the RBA will cut interest rates in the February meeting, Bullock said that the decision would be data-dependent but was confident that wages and demand are slowing.Before the RBA’s policy decision, analysts at ANZ and Westpac predicted the RBA to start reducing interest rates from May 2025.This week, investors should brace for more volatility in the Australian Dollar (AUD) as the domestic employment data is scheduled to be released on Thursday.Meanwhile, the US Dollar (USD) rises ahead of the United States (US) Consumer Price Index (CPI) data for November, which will be released on Wednesday. The inflation data will influence market speculation for the Federal Reserve’s (Fed) interest rate action in the policy meeting on December 18.There is an almost 86% chance that the Fed will reduce interest rates by 25 basis points (bps) to 4.25%-4.50%, according to the CME FedWatch tool.More By This Author:USD/CAD Refreshes Four-Year High Near 1.4200 With US Inflation, BoC Policy In Focus
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