Snapshot: AUD/USD is trading at 0.7013, down 0.04% on the day. The Reserve Bank of Australia’s hawkish hold stance, with inflation still above target and the board retaining hiking optionality, remains the dominant domestic driver. Markets are awaiting key domestic CPI and labour force data this week for further policy clues.
- RBA’s unanimous hold at 4.35% with a clear bias to hike further if needed, underscored by recent CPI prints above the 2-3% band.
- US 10Y yields trading up 0.76% to 4.485% presents a headwind, alongside elevated VIX levels.
Bias into NY: The Aussie faces a challenging path higher with US yields firming and risk sentiment tepid. A clear downside break below 0.7000 is a distinct possibility if US data prints strongly.