AUD/USD jumps 0.40%, looks to snap six-day losing trend
- AUD/USD ticks higher as Westpac pushes out the RBA rate cut forecast.
- The US stock index futures rise, lending support to the AUD.
The Aussie dollar bears are taking a breather on Monday, allowing a bounce in AUD/USD, with an influential economist pushing out his rate cut forecast to November from October.
The currency pair is currently trading at 0.7050, representing a 0.40% gain on the day. The pair fell by nearly 0.30% on Friday to 0.7006 – its sixth straight consecutive decline.
RBA to cut rates in November
Westpac, one of the big four Australian banks, expects the Reserve Bank of Australia (RBA) to cut the overnight cash rate (benchmark interest rate) to a new record low of 0.1% from the current 0.25% in November.
Until last week, Westpac's economist Bill Evans was confident that the rate cut would happen at the Oct. 6 meeting.
The central bank is also expected to reduce the three-year bond yield target to 0.1% from 0.25%, the Term Funding Facility rate to 0.1% and the RBA rate on Exchange Settlement balances to 0.01%.
Apart from Westpac's decision to push out the rate cut forecast, the 0.30 gain in the S&P 500 futures could be drawing bids for the AUD.
Significant gains, however, may remain elusive, courtesy of the resurgence of coronavirus in Europe and caution ahead of the first debate between the US President Donald Trump and rival Joe Biden on Tuesday.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
