The Australian dollar outperforms its major counterparts, with AUD/USD at risk for a larger rebound as the Reserve Bank of Australia (RBA) gradually alters the outlook for monetary policy.
A bullish engulfing appears to be taking shape in the aussie-dollar exchange rate as Governor Philip Lowewarns ‘that ‘it is more likely that the next move in interest rates will be up, rather than down,’ but it seems as though the central bank will carry the record-low cash rate into 2018 as officials are ‘prepared to be patient.’ With that said, the RBA may continue to tame expectations for an imminent rate-hike as ‘the subdued outlook for inflation mean that there is not a strong case for a near-term adjustment in monetary policy.’
In turn, the RBA’s wait-and-see approach may keep the broader outlook for AUD/USD tilted to the downside, but the near-term weakness in the exchange rate appears to be abating especially as the Relative Strength Index (RSI) continues to hold above oversold territory.
AUD/USD Daily Chart
