Chart of the day: AUDUSD (04.11.2025)

RBA held the cash rate steady at 3.6% in a unanimous decision amid renewed inflation pressures and a tight labor market. Governor Michele Bullock stated the board has no predetermined stance on future rate moves, emphasizing data dependency and uncertainty.

Key headlines:

• Core inflation is expected to remain above 3% over the coming year, with some inflationary pressures considered temporary.

• Mixed economic data include record high housing prices and credit growth, contrasting with manufacturing decline and rising unemployment at 4.5%.

• Bullock highlighted the labor market remains somewhat tight despite the unemployment rise and confirmed no rate increase was planned at this meeting.

• International risks include geopolitical tensions and trade uncertainties, though recent tariff truce has eased concerns.

• The RBA targets inflation at 2.5%, balancing price stability with sustainable full employment.

Governor Michele Bullock emphasized that the board has no predetermined stance on future policy moves, highlighting considerable uncertainty around inflation’s trajectory and the broader economic outlook. She noted that while some inflationary pressures may be temporary, core inflation is expected to stay above 3% over the coming year, and the question remains about the extent and timing of any future rate cuts.

The disinflation process has recently come to a general halt, undermining the rationale for a rapid focus on lowering interest rates in major economies. Source: Bloomberg Financial Lp

Following the RBA announcement, the Australian dollar (AUD) posted one of the worst intraday performances among developed-market currencies. The cautious tone and unchanged rate decision combined with external headwinds pressured the AUD below 0.6550 versus the USD. Market participants remain wary about Australia’s growth prospects and the timing of potential future rate cuts, keeping downside risks elevated. Technical support is eyed around 0.6500, with further guidance expected from upcoming economic data and RBA communications.

Today, the AUDUSD pair is testing the 200-day EMA (the gold curve on the chart), which has so far been a key foundation for the ongoing long-term uptrend. If the pair manages to stabilize above this zone, there is a chance that this trend will continue. Source: xStation