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AUSTRALIAN DOLLAR DIPS ON RENEWED US DOLLAR STRENGTH

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  • AUD/USD falls as the USD regains strength.
  • RBA holds rates steady but remains hawkish, citing inflation risks.
  • The Fed's neutral outlook suggests caution regarding future rate cuts.

The AUD/USD pair declined by 1.25% to 0.6600 on Friday, continuing its downtrend. The renewed strength of the US Dollar weighs on the pair despite improved risk sentiment. However, the hawkish stance of the Reserve Bank of Australia (RBA) and expectations of additional Chinese stimulus could support the Aussie.

The AUD/USD pair experienced volatility amid the recent US presidential election and RBA's monetary policy stance. Trump's election victory initially triggered a decline in the Aussie, but the RBA's hawkish stance stabilized the currency. The RBA's emphasis on restrictive interest rates and positive signs from China have provided support.


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