AUD/USD wobbles around 0.6520 as investors await RBA's monetary policy decision

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The AUD/USD pair trades sideways around 0.6520 during the European trading session on Monday. The Aussie pair consolidates as investors await the monetary policy announcement by the Reserve Bank of Australia (RBA) on Tuesday.

AUD/USD consolidates around 0.6520 as investors shift their focus to the RBA’s monetary policy outcome on Tuesday.
The RBA is expected to cut its OCR by 25 bps to 3.6%.
Fed dovish expectations have kept the US Dollar on the backfoot.

The RBA is expected to cut its key Official Cash Rate (OCR) by 25 basis points (bps) to 3.6% as price pressures cooled down significantly in the second quarter of the year. In the last quarter, inflation grew at a moderate pace of 2.1%, the lowest level seen since the first quarter of 2021.

In the July monetary policy meeting, the RBA surprisingly held interest rates steady as officials didn’t want to convey that the central bank is on a pre-defined monetary easing cycle.

Meanwhile, the US Dollar (USD) faces selling pressure as traders become increasingly confident that the Federal Reserve (Fed) will reduce interest rates in the September monetary policy meeting. Fed officials have also started arguing in favor of unwinding monetary policy restrictiveness amid growing concerns over the labor market.

US Dollar PRICE Last 7 days

The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the weakest against the British Pound.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.51%	-1.29%	0.13%	-0.08%	-0.64%	-0.57%	0.38%
EUR	0.51%		-0.73%	0.65%	0.43%	-0.28%	-0.07%	0.88%
GBP	1.29%	0.73%		1.41%	1.17%	0.46%	0.66%	1.63%
JPY	-0.13%	-0.65%	-1.41%		-0.21%	-0.92%	-0.71%	0.41%
CAD	0.08%	-0.43%	-1.17%	0.21%		-0.72%	-0.49%	0.45%
AUD	0.64%	0.28%	-0.46%	0.92%	0.72%		0.21%	1.16%
NZD	0.57%	0.07%	-0.66%	0.71%	0.49%	-0.21%		0.94%
CHF	-0.38%	-0.88%	-1.63%	-0.41%	-0.45%	-1.16%	-0.94%

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).

Going forward, investors will pay close attention to the US Consumer Price Index (CPI) data for July, which is scheduled to be released on Tuesday. Economists expect the headline and the core CPI – which excludes volatile food and energy prices – rose at a faster pace of 2.8% and 3.0% on year, respectively.

Economic Indicator

RBA Interest Rate Decision

The Reserve Bank of Australia (RBA) announces its interest rate decision at the end of its eight scheduled meetings per year. If the RBA is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Australian Dollar (AUD). Likewise, if the RBA has a dovish view on the Australian economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for AUD.