AUD to USD Forecast: Aussie Eyes RBA Chart Pack Amid Rate Hike Speculation

RBA Chart Pack in Focus after Rate Hike Discussions

On Wednesday (June 19), the RBA Chart Pack will require investor consideration and may influence buyer appetite for the AUD/USD.

RBA Governor Michele Bullock delivered a hawkish RBA press conference on Tuesday, saying that the Board discussed hiking interest rates. Governor Bullock highlighted that the Board wanted to emphasize that they were ready to address upside inflation risks.

The RBA Chart Pack will give investors graphics detailing the Australian economy and financial markets. Moreover, the RBA Chart Pack provides information about Australia’s main trading partners, including China and commodity price trends.

Charts relating to growth, inflation, the Chinese economy, and commodity price trends could influence the AUD/USD.

Recent economic indicators from Australia revealed tighter labor market conditions that could support wage growth. Higher wages could raise borrowing costs and fuel consumer spending and demand-driven inflation.

Nevertheless, China also needs consideration.

The China Effect on the Aussie Dollar

China’s economic woes will likely remain a focal point. Industrial production slowed in May, with fixed asset investments softer than in April.

The macroeconomic environment is also a consideration for the RBA. China accounts for one-third of Australian exports. Australia has a trade-to-GDP ratio of over 50%, with 20% of its workforce in trade-related jobs. Weakening demand could impact the Australian economy, the labor market, and household spending.

There are no stats from Australia or China to consider. Nevertheless, investors should monitor news from Beijing. A retaliation to EU tariffs on EV imports from China and stimulus chatter could move the dial.

While China is a focal point, the US economic calendar and Fed rate path also need consideration.

US Economic Calendar: Housing Sector and Fed Chatter

Later in the session on Wednesday, the US housing sector will be in the spotlight.

Economists forecast the NAHB Housing Market Index to remain steady at 45 points in June.

Rising expectations of a September Fed rate cut could drive buyer demand for homes. An improving housing market environment could boost consumer confidence. Upward trends in consumer confidence may fuel consumer spending and demand-driven inflation.

A pickup in consumer spending could force the Fed to leave interest rates higher for longer. A higher-for-longer Fed rate path may raise borrowing costs and reduce disposable income. Downward trends in disposable income could affect consumer spending and dampen demand-driven inflation.

Beyond the numbers, investors should monitor FOMC member chatter. Comments regarding inflation, the economic outlook, and the timing of interest rate cuts could move the dial.

Short-Term Forecast

Near-term AUD/USD trends will hinge on central bank chatter and private sector PMIs from Australia and the US. A weaker-than-expected US S&P Global Services PMI could raise bets on a September Fed rate cut and tilt monetary policy divergence toward the Aussie dollar. Considering the RBA discussion about hiking interest rates, weak numbers from the US would bring $0.67 into play.

AUD/USD Price Action

Daily Chart

The AUD/USD hovered above the 50-day and 200-day EMAs, confirming the bullish price trends.

An Aussie dollar breakout from the $0.66500 handle could signal a climb to the $0.67003 resistance level. A break above the $0.67003 resistance level could give the bulls a run at $0.67500.

The RBA, US retail sales, and FOMC Member commentary require consideration.

Conversely, an AUD/USD fall through the 50-day EMA could signal a drop to the 200-day EMA and the $0.65760 support level.

With a 14-period Daily RSI reading of 54.70, the AUD could return the $0.67500 handle before entering overbought territory.