Australian Dollar Talking Points
AUD/USD[1] appears to be stuck in a narrow range as Malcolm Turnbull gets ousted[2], with Scott Morrison now set to lead the Liberal party, and the exchange rate may continue to consolidate ahead of the next Reserve Bank of Australia (RBA) meeting on September 4 as the central bank is widely expected to keep the official cash rate (OCR) at the record-low.
Bearish AUD/USD Trends Remain Intact Following Turnbull Turmoil
With Australia slated to hold elections in 2019, political headwinds may continue to drag on AUD/USD as the ongoing shuffle within parliament limits the RBA’s scope to normalize monetary policy.
Recent comments from the RBA suggest the central bank will stick to its wait-and-see approach throughout the remainder of the year as ‘there was no strong case for a near-term adjustment in monetary policy,’ and Governor Philip Lowe & Co. may continue to tame bets for higher interest rates as ‘once-off declines in some administered prices in the September quarter are expected to result in headline inflation in 2018 being a little lower than earlier expected.’
With that said, uncertainty surrounding the fiscal outlook paired with the more of the same from Governor Lowe & Co. may continue to sap the appeal of the Australian dollar[3], and AUD/USD may continue to track the downward trend from earlier this year as market participants push out bets for an RBA rate-hike. Sign up and join DailyFX Currency Analyst David Song LIVE[4] for an opportunity to discuss potential trade setups.
AUD/USD Daily Chart
- AUD/USD may continue to face range-bound conditions following the failed attempt to test the (0.7484),
