In August, the RBA cut the cash rate by 25 basis points, to 3.6%. RBA Governor Michele Bullock hinted at further policy easing during the press conference. She stating that the RBA’s 2025 forecasts are assuming a couple more cuts. Notably, the RBA didn’t dismiss the possibility of back-to-back cuts, indicating that board members will assess the data at each meeting.

When do economists expect the RBA to cut rates again?

AMP Head of Investment Strategy and Chief Economist Shane Oliver remarked on the RBA’s Meeting Minutes, stating:

“RBA minutes reiterated dovish guidance, noting the cash rate is ‘still somewhat restrictive’ & ‘some further reduction in the cash rate over the coming year’ is likely required, with reference to the pace being gradual and data determined. We expect cuts in Nov, Feb & May to 2.85%.”

Today’s inflation numbers would have to be significantly lower than in June to pressure the RBA into a September cut.

AUD/USD: Key Scenarios to Watch

• Bearish AUD/USD Scenario: Softer inflation or dovish RBA cues. These factors could drag AUD/USD below the 50-day EMA and bring the 200-day EMA and $0.6450 support level into play.
• Bullish AUD/USD Scenario: Hotter-than-expected inflation or hawkish RBA chatter. These factors could send AUD/USD toward the $0.6550 resistance level, paving the way toward the $0.66 level.

Explore our full AUD/USD analysis, including key trends and trade data, here.

AUD/USD Daily Outlook: Will Fed Speakers Narrow Rate Differentials?

While economists expect a November RBA rate cut, Fed Chair Powell’s hint of a near-term Fed rate cut sent AUD/USD to $0.65.

FOMC members’ support for a September rate cut and further policy easing in Q4 would narrow the US-Aussie rate differential in favor of the Aussie dollar. A narrowing rate differential may drive AUD/USD toward the $0.6550 level. A break above $0.6550 brings $0.66 into sight.

However, rising concerns about inflation over a cooling labor market could signal a less dovish Fed policy stance. Fewer rate cuts may widen the rate differential in favor of the US dollar. A wider differential could push AUD/USD below the 50-day EMA, exposing the 200-day EMA. If breached, $0.6400 would be the next support level.