AUD/USD Rebounds Amid Post-Election Moves and RBA Decision
AUD/USD rose on Wednesday as post-election moves weighed on the greenback, allowing the Australian Dollar to rebound from two-week lows after the Reserve Bank of Australia’s dovish 25bp rate rise. The pair traded near 0.7008, up 0.63% on the day, having earlier touched 0.6954. In the US, Democrats won majorities in both chambers of Congress, setting up a divided government and adding political and fiscal uncertainty. The Dollar Index (DXY) sat around 101.50, down about 0.35%, after dipping to 101.21, its lowest since 30 September, before paring losses following data.
US Economic Data and Interest Rate Outlooks
October’s ADP report showed private payrolls rose 86K versus 69K expected, while September was revised down to 86K from 90K. The ISM Services PMI eased to 54.5 from 54.9, below the 54.8 consensus but still in expansion. Markets put the probability of a December Fed hike at 82%, with attention turning to US Initial Jobless Claims and Nonfarm Payrolls. In Australia, the RBA lifted the cash rate to 4.85% on a 6-3 vote, while OIS pricing implied a 10% chance of another 25bp hike in December, just 8bp by February 2027, and a 9bp cut by September 2027.
