Snapshot: The Aussie is holding firm above the 0.7000 handle as the Reserve Bank of Australia’s reluctance to ease from its 4.10% cash rate continues to anchor domestic yield support. This policy hawkishness faces a major test today as the session pivots to US Retail Sales at 08:30 ET and the crucial FOMC rate decision at 14:00 ET.
- The RBA’s refusal to commit to a rate-cut path due to uneven services inflation leaves the currency structurally supported, keeping the 0.7000 level as a solid near-term floor.
- Any upside surprise in US retail sales or a hawkish shift in the FOMC dot plot at 14:00 ET poses the primary near-term risk, threatening to squeeze moderately long speculative positioning of +18,160 contracts.
Bias into NY: We remain tactically bullish on AUD/USD above 0.7000, targeting 0.7060, as the RBA’s relative hawkishness should limit downside unless the Fed delivers a major hawkish surprise later today.