The Australian dollar rose 0.51% on Monday, with AUD/USD trading near 0.6980 and edging towards the 0.7000 mark. Support came after a Reserve Bank of Australia official flagged signs that neutral interest rates are rising in Australia and globally, a backdrop that points to policy staying restrictive for longer and reduces scope for easing without rekindling inflation pressures. Improved sentiment from China also underpinned the currency, with GDP growth running at 4.5% year-on-year in the third quarter, up from 4.3% previously and above expectations, which matters given Australia’s commodity exposure to Chinese demand, including iron ore.
Central Bank Outlook and Currency Valuation
Attention remains on relative central-bank settings as shifts in US dollar pricing, tied to the Federal Reserve outlook, can steer the pair. Elsewhere, external valuation gauges cited an IMF estimate of 17% overvaluation on a real effective exchange rate basis, while AUD/USD was described as trading near the top of a three-week 0.6900–0.7000 range.
Technical Levels and Market Indicators
Technically, it last sat at 0.6983 above the 100-period SMA at 0.6961 and the 200-period SMA at 0.6964; the 14-period RSI was near 59, with resistance at 0.6995 then 0.7014, and supports at 0.6964, 0.6961, 0.6950 and 0.6932.
