AUD/USD dropped back to the lower end of its 0.6580-0.6630 range which has been in place since September 30, BBH FX analysts report.

AUD/USD can edge higher in the short term

"Australia’s Westpac-Melbourne Institute Consumer Sentiment Index fell -3.5% m/m in October to a six-month low at 92.1 driven by more downbeat views on the near-term outlook, especially prospects for family finances. Encouragingly, consumers are still not concerned about the outlook for jobs as the Unemployment Expectations Index declined -2.9% to a two-month low at 127.6 in October."

At its last September 30 meeting, the RBA left the policy rate at 3.60% and signaled that the bar for additional rate cuts is high. The next RBA meeting is November 4 and cash rate futures imply 40% odds of a 25bps cut. Over the next 12 months, cash rate futures continue to more than fully price-in one 25bps cut and the policy rate to bottom around 3.35%."

"Bottom line: AUD/USD can edge higher as the RBA is on track to ease more cautiously than the Fed and global economic activity is resilient."