Australian Dollar Extends Decline
On Wednesday, the Australian dollar softened to approximately $0.656, continuing its decline from the previous session due to the persistent strength of the US dollar. The rise of the US dollar was fueled by increased safe-haven demand amid the government shutdown now entering its second week. This situation was exacerbated by President Trump's threat of widespread federal employee layoffs and diminishing hopes for a swift resolution. On the monetary policy front, expectations for an imminent interest rate cut by the Reserve Bank of Australia have been tempered following a hawkish outlook last week. Currently, futures indicate about a 35% probability of a rate cut in November and a 56% chance in December, rendering the upcoming third-quarter Consumer Price Index (CPI) report crucial. At the same time, the Australian dollar received some support from the dramatic rise in gold prices. The government has projected that gold will become Australia's second-most valuable export, highlighting the country's prominent role as a leading global producer and exporter.
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