On Monday (November 4th), during the Asian market early session, the Australian dollar opened higher against the US dollar and steadily rose, currently trading at 0.6607 US dollars, an increase of about 0.76%, reaching a high of 0.6609. The US Dollar Index continued to decline, with the drop expanding to 0.62%, nearing 103.68, close to last Friday's two-week low, providing strong support for non-US currencies. Before the US election, polls showed Harris and Trump had similar support rates, with the tight competition reducing market bets on "a Trump victory boosting the dollar," putting the dollar under pressure.
From a technical perspective, the Australian dollar versus the US dollar remains within a fluctuating range, with the 10-day and 21-day moving averages showing a downward trend, while momentum indicators on the daily chart reflect a complex pattern. Initial support is seen at last week's low of 0.6537, with key resistance located near the 21-day moving average of 0.6661.
Apart from the US election, the market is closely watching the rate decision to be announced by the Reserve Bank of Australia this week. A recent Reuters survey shows that 30 economists generally expect the central bank to keep the rate unchanged at 4.35% on Tuesday, with market focus on whether there will be any slight adjustments in the policy stance.
Although Australia's Q3 CPI year-on-year growth rate fell to 2.8%, returning to the Reserve Bank's target range of 2%-3% for the first time, the core inflation rate remains high. Coupled with an increase in immigration numbers and an unemployment rate stable at 4.0%-4.2%, alongside a record-high employment participation rate of 67.2%, this indicates Australia's economy is resilient, reducing pressure on the Reserve Bank to cut rates. Interest rate futures suggest a 95% likelihood of the rate remaining unchanged on Tuesday.
Analysts note that the Reserve Bank's monetary policy decisions continue to be influenced by a combination of domestic economic data, geopolitical factors, and international market movements. The outcome of the US election and relations with major trading partners will also be critical factors affecting future policy. Since the market generally expects the Reserve Bank to maintain a cautious policy stance, it is anticipated that this rate decision might have a limited impact on the Australian dollar.
