The Australian dollar edged higher toward US$0.70, trading above recent multi‑month lows as a sharp fall in US Treasury yields pressured the greenback. A rally in US government bonds pulled yields back from a 24‑year high, offering some respite to global markets after weeks of heavy selling. The decline in yields helped the Aussie stay on course for a modest weekly gain, its first in five weeks.
Attention is now turning to Australia’s September employment report, due next Thursday, after the unemployment rate unexpectedly rose to 4.6% in August. Any further increase in joblessness would bolster the case against another Reserve Bank of Australia rate hike, following last month’s move that lifted the cash rate to 4.60%. Markets are currently pricing in about a 30% probability of a hike in November, rising to 46% for December.
Investors will also scrutinise the minutes of the RBA’s 13 October meeting, along with the September‑quarter CPI data later this month, with core inflation expected to remain elevated.
