Australian Dollar hits fresh monthly high as hawkish RBA offsets USD gains

A fourth consecutive day of gains extends the AUD/USD recovery from a multi-month low.
Support for the Aussie persists following recent hawkish remarks by RBA officials.
Despite USD support from geopolitical risks and Fed rate hike expectations, the pair continues to advance.

AUD/USD reaches around 0.7030, a new monthly high. The pair advances for the fourth consecutive day on Wednesday, with gains during the first half of the European session supported by recent hawkish remarks from Reserve Bank of Australia (RBA) officials. This extends the rebound from below 0.6900, last week's trough and the lowest level since early July.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Rate hike expectations remain in place ahead of the 3 November policy meeting following comments from RBA officials. On Monday, RBA Assistant Governor Christopher Kent said there were reasonable signs of rising neutral interest rates in Australia and globally. Earlier today, RBA Deputy Governor Andrew Hauser also warned that Q3 trimmed-mean inflation may exceed expectations. A stronger-than-expected Q3 GDP reading from China provides further support for the Australian Dollar (AUD).

Hopes of US-Iran peace talks leave the US Dollar (USD) struggling to draw significant buying interest. Nevertheless, uncertainty over the Middle East crisis and the US-Iran confrontation over the Strait of Hormuz keeps the geopolitical risk premium intact. The safe-haven dollar also benefits from growing expectations that the US Federal Reserve (Fed) will increase borrowing costs again in December, as oil prices fuel inflation concerns. These factors have done little to restrain the AUD/USD advance.

The balance therefore points to further gains in spot prices, with buyers likely to emerge on any corrective dip. Global flash PMIs, due on Friday, are the next release on traders' radar. Attention, however, remains centred on the closely watched two-day FOMC meeting beginning next Tuesday. Next Thursday's Advance US Q3 GDP release and US Personal Consumption Expenditures (PCE) Price Index, the Fed's preferred inflation measure, will provide additional direction.

Daily chart: AUD/USD

0.7034 SMA Keeps Near-Term AUD/USD Bias Bearish

A bearish near-term bias persists as AUD/USD trades just under its 100-day Simple Moving Average (SMA) at 0.7034 and below the mid-range 50.0% Fibonacci retracement at 0.7064. Above spot prices, the SMA and successive Fibonacci levels at 0.7104 and 0.7162 form an overhead resistance cluster. Advances could therefore meet resistance around these levels.

Initial downside support lies at 0.7024, the 38.2% Fibonacci retracement. The 23.6% level at 0.6974 provides protection for the recent pullback, ahead of a deeper structural floor near 0.6893. While AUD/USD remains below the 100-day SMA at 0.7034, a breach of 0.7024 would clear a path to 0.6974 and possibly 0.6893, whereas attempts to recover

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Australian Dollar Weekly Performance

The Australian Dollar (AUD) recorded its strongest performance against the Japanese Yen this week. The table below sets out its percentage changes against the major currencies listed.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.29%	-0.65%	0.05%	-0.47%	-0.98%	-0.53%	-0.22%
EUR	0.29%		-0.33%	0.37%	-0.11%	-0.62%	-0.21%	0.10%
GBP	0.65%	0.33%		0.72%	0.23%	-0.27%	0.12%	0.48%
JPY	-0.05%	-0.37%	-0.72%		-0.50%	-1.03%	-0.57%	-0.15%
CAD	0.47%	0.11%	-0.23%	0.50%		-0.53%	-0.03%	0.29%
AUD	0.98%	0.62%	0.27%	1.03%	0.53%		0.39%	0.72%
NZD	0.53%	0.21%	-0.12%	0.57%	0.03%	-0.39%		0.36%
CHF	0.22%	-0.10%	-0.48%	0.15%	-0.29%	-0.72%	-0.36%

Percentage changes between major currencies are displayed in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. Selecting the Australian Dollar on the left and following its row across to the US Dollar, for instance, gives the percentage change for AUD (base)/USD (quote) in the corresponding cell.