Snapshot: The Aussie is holding firm above the 0.7000 handle as the Reserve Bank of Australia’s reluctant stance on rate cuts offsets broader pre-FOMC positioning. Governor Bullock’s warning that inflation progress remains uneven keeps the cash rate anchored at 4.10%, with a tight labor market pricing out near-term easing. The immediate tactical focus shifts to the US Retail Sales print at 08:30 ET and the FOMC decision at 14:00 ET.
- RBA Hawkish Divergence: The RBA remains highly hesitant to commit to a rate-cut path, demanding a significant cooling in trimmed-mean CPI to unlock a move, which keeps domestic yields supported and limits downside.
- Fed Dot Plot Risk: Speculative positioning is moderately long at the 63rd percentile, meaning any hawkish shift in the FOMC’s economic projections at 14:00 ET could trigger a rapid unwind back toward 0.6950.
Bias into NY: We lean mildly bullish on AUD/USD toward 0.7040, as the RBA’s hawkish policy floor should limit downside ahead of the high-stakes Fed decision at 14:00 ET.