AUD/USD slides further to near 0.6560 as US Dollar extends rally

US Dollar Price This week

The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the Japanese Yen.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.83%	0.21%	2.00%	-0.02%	0.28%	1.01%	0.59%
EUR	-0.83%		-0.72%	1.08%	-0.88%	-0.58%	0.14%	-0.28%
GBP	-0.21%	0.72%		1.90%	-0.16%	0.14%	0.86%	0.44%
JPY	-2.00%	-1.08%	-1.90%		-1.93%	-1.74%	-1.04%	-1.43%
CAD	0.02%	0.88%	0.16%	1.93%		0.34%	1.03%	0.61%
AUD	-0.28%	0.58%	-0.14%	1.74%	-0.34%		0.72%	0.31%
NZD	-1.01%	-0.14%	-0.86%	1.04%	-1.03%	-0.72%		-0.42%
CHF	-0.59%	0.28%	-0.44%	1.43%	-0.61%	-0.31%	0.42%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

However, the upside in the US Dollar appears to be limited as the US government has entered in its second week of shutdown.

Meanwhile, investors await the Federal Open Market Committee (FOMC) minutes of the September policy meeting, which will be published at 18:00 GMT. Financial market participants will pay close attention to FOMC minutes to get fresh cues on the monetary policy outlook.

In September, the Fed reduced interest rates by 25 basis points (bps) to 4.00%-4.25% and signaled two more in the remainder of the year. The CME FedWatch tool also shows that traders see an 82% chance that the Fed will cut interest rates by 25 bps in each of its two policy meetings remaining this year.

In Australia, investors await one-year forward Consumer Inflation Expectations data for October, which will be published on Thursday. The inflation expectations data will influence market expectations for the Reserve Bank of Australia’s (RBA) monetary policy outlook. In September, 12-months inflation expectations rose at a faster pace to 4.7%.

Economic Indicator

FOMC Minutes

FOMC stands for The Federal Open Market Committee that organizes 8 meetings in a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.

Why it matters to traders?

Minutes of the Federal Open Market Committee (FOMC) is usually published three weeks after the day of the policy decision. Investors look for clues regarding the policy outlook in this publication alongside the vote split. A bullish tone is likely to provide a boost to the greenback while a dovish stance is seen as USD-negative. It needs to be noted that the market reaction to FOMC Minutes could be delayed as news outlets don’t have access to the publication before the release, unlike the FOMC’s Policy Statement.

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