Australian Dollar: Is support from an RBA hike likely to be limited? – TD Securities

Further upside for the Australian Dollar appears limited, with markets already pricing in an 80% probability of a November RBA rate hike, according to TD Securities FX strategist Howard Du. Weaker sentiment towards global equities has kept AUD/USD below its 200-day SMA. However, the pair could move above this key technical level if the US midterm elections are followed by a broad-based USD selloff.

Is AUD Upside Limited as the Cross Outlook Remains Bearish?

"The market currently prices around an 80% chance of a November RBA rate hike."

"Unlike central bank rate hike pricing elsewhere in the world, the market is hesitant to price in more RBA rate hikes in the coming months, in line with our call."

"With the market already pricing in another RBA rate hike in the near term, we would not expect the central bank decision to lend much further support for the AUD."

"AUD/USD has been trading below the 200d SMA for the past month due to softening global equity sentiment."

"A break above the key level is more likely if the USD could see a broad-based relief selloff after the US midterm election."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)