FX.co ★ Aussie Dollar Rises Ahead of RBA Decision

The Australian dollar advanced to approximately $0.655 on Monday, as market participants braced for the keenly anticipated policy update from the Reserve Bank of Australia (RBA) scheduled for release the following day. It is broadly predicted that the RBA will maintain the official cash rate (OCR) at 3.60%, with expectations leaning toward a 25 basis point reduction in November. Thus far in 2025, the RBA has implemented three rate cuts. Despite this monetary easing, Governor Michele Bullock remains steadfast in her cautious and data-centric approach, reiterating the bank’s dedication to its 2-3% inflation target. The Consumer Price Index (CPI) data for Q2 affirmed a continued slowdown in inflation, with headline inflation declining to 2.1% from 2.4%, and the trimmed mean CPI decreasing to 2.7% from 2.9%. However, the monthly CPI for August was unexpectedly higher, climbing slightly to 3.0% from 2.8%. Concurrently, investors are poised for a slew of economic reports expected tomorrow, including data on building permits, housing metrics, PMIs, and trade figures.