FX.co ★ Australian Dollar Halts 3-Day Rally

The Australian dollar hovered around the $0.70 mark after a three-session rally, as investors looked ahead to key central bank updates for guidance on the policy outlook. In the United States, the Federal Reserve is set to release minutes from its September meeting and several policymakers are scheduled to speak this week. Following a weaker-than-expected labor market report, futures markets now imply roughly an 80% probability that interest rates will be left unchanged this month.

The Aussie also drew some support from broad-based weakness in the US dollar, which recorded its steepest decline against the euro as tensions in European bond markets eased. Domestically, however, sentiment was more subdued. Australian consumer confidence fell for the second consecutive month in October, as higher borrowing costs put further strain on household finances and amplified cost-of-living pressures.

Interest rate markets currently assign a 75.7% probability that the Reserve Bank of Australia will keep rates on hold in November, with a 24.3% chance of another hike. Investors will also be closely watching the RBA’s meeting minutes next week for additional insight into the central bank’s policy stance.