The Australian dollar was above 70 U.S. cents at the Reserve Bank of Australia’s (RBA) Oct. 21 reference time, as an inflation report and interest rate decision approached.
At 1 a.m. ET (05:00 UTC) on Oct. 21, the RBA recorded $0.7010 per Australian dollar. Its comparable readings were $0.6984 on Oct. 20 and $0.6975 on Oct. 19. The figures show the currency rising across three consecutive reference points.
The Oct. 20 intraday move above 70 U.S. cents came before the latest RBA reading. The bank’s rate captures the currency at a fixed time; it does not establish the highest price traded during the day.
FXStreet reported that United Overseas Bank (UOB) considered a move toward $0.7035 possible over one to three weeks if the Australian dollar stayed above $0.6965. FXStreet also said the currency’s Oct. 20 move past $0.7015 exceeded the top of a range UOB had previously expected. The $0.7035 level is a conditional forecast, while the RBA figures are observed rates.
A stronger Australian dollar has effects beyond currency trading. The RBA says it can reduce the local cost of imports while making Australian exports more expensive for overseas buyers. Those effects can pull in different directions for households and businesses.
The RBA’s cash-rate target stands at 4.60%. RBA Deputy Governor Andrew Hauser said on Oct. 21 that higher oil prices and domestic capacity pressures had worsened the inflation outlook since August. He said tighter monetary policy was already slowing parts of the economy.
Further action against inflation would add pressure to economic activity and employment, Hauser said. He also described different costs for households: higher interest rates weigh on mortgage holders, while inflation is especially painful for renters on low incomes.
The Australian Bureau of Statistics is scheduled to release September consumer price data at 8:30 p.m. ET on Oct. 27 (00:30 UTC Oct. 28). The RBA’s next rate announcement is scheduled for 10:30 p.m. ET on Nov. 2 (03:30 UTC Nov. 3).
