Australia, calmness before a potential volatility?

The Aussie dollar was mostly steady ahead of the RBA's monthly policy announcement, due Nov. 3. The Aussie could strengthen should the bank leave its cash rate unchanged at 2.0 percent. 

"However, if the bank should decide to cut rates in the wake of more weak data from China the Aussie would be at greater risk of revisiting recent multiyear lows", says Western Union. 

Market pricing of the probability of a 25bp rate cut now stands near 45%. If we are wrong and the RBA cuts rates, the market will price in a higher probability of a follow-up cut in February, even though we think the bigger, more important risk looming over Australia is the more uncertain outlook for China