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Aussie climbs on upbeat risk appetite and a softer US Dollar. Traders downplay the potential impact of new tariffs. RBA expected to cut the cash rate from 4.35% to 4.10%. The AUD/USD pair posts a fresh two-month high at 0.6373 in Monday’s session. The Aussie pair strengthens as the Australian Dollar (AUD) performs strongly in an upbeat market mood. Market sentiment is favorable for risky assets as investors expect United States (US) President Donald Trump’s tariff agenda will not prove as impactful as initially feared, as well as a softer US Dollar (USD). Daily digest market movers: Aussie set to test RBA decision Global trade disputes have recently boosted risk-sensitive currencies, with the Australian Dollar tracking higher as the United States Dollar retreated. The Aussie capitalized on the Greenback’s pullback, clawing back from midweek losses and briefly reclaiming the 0.6399 region at the top of its monthly range. With inflation pressures in Australia trending lower, market participants anticipate a Reserve Bank of Australia (RBA) rate cut from 4.35% to 4.10% on Tuesday. Nonetheless, the RBA could deliver a hawkish surprise by highlighting labor-market tightness and residual inflation risks. In that sense, markets will closely monitor the tone of the statement as the RBA could continue being the last of the G10 central banks to cut rates. AUD/USD technical outlook: Momentum builds above 0.6365 as pair eyes 100-day SMA The AUD/USD pair rose to 0.6365 on Monday, notching levels unseen since December and firmly crossing its 20-day Simple Moving Average. The Relative Strength Index (RSI) is at 67, pushing into near-overbought territory with strong upside momentum, while the Moving Average Convergence Divergence (MACD) histogram prints rising green bars. Should risk appetite remain robust and markets absorb any RBA rate decision smoothly, the Aussie could extend gains toward the 100-day Simple Moving…

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Filed under: News - @ February 17, 2025 11:20 pm