Benefits of Using Content Management of Performance
The Australian Dollar (AUD) extended its advance on Monday, with AUD/USD rising for a second straight session as the US Dollar (USD) weakened on renewed bets for further Federal Reserve (Fed) rate cuts. Investors also remain cautious ahead of potential risks of a US government shutdown starting October 1, adding to pressure on the greenback.
The AUD gained additional support from expectations that the Reserve Bank of Australia (RBA) will hold its policy rate steady at Tuesday’s meeting. Stronger-than-expected consumer price index data for August has reduced the likelihood of imminent policy easing, with markets now assigning only a 6.5% chance of a 25-basis-point rate cut this month, and a 38.2% probability of such a move at the November meeting.
On the fiscal front, Australia reported a budget deficit of nearly A$10 billion (about $6.55 billion) for the year ending June 2025, ending two years of consecutive surpluses. The deficit was far smaller than the Treasury’s projection of A$27.9 billion, suggesting stronger revenue inflows or tighter expenditure than initially anticipated.
