After a very active morning, prices have settled down in quiet ranges this afternoon as the month draws to a close. Traders are looking ahead to ISM data from the US tomorrow as well as another 25 bp hike from the RBA tomorrow.
RBA rate hikes have been paying diminishing returns for the AUD as the market always tightens faster than the central banks (prices in moves before they come). This would be the first time in the RBA’s history that they hike three meetings in a row; since there is a two-month gap between meetings, traders expect them to hike tomorrow and reassess between meetings.
AUD/USD trades quietly at 0.9140 after spending the US session trading between 0.9110 and 0.9160.
