AUD/USD steadies after weekly low as markets eye FOMC Minutes, US shutdown impact

• The Australian Dollar steadies after hitting the lowest level since September 29.
• The US government remains in its second week of shutdown, weighing on market confidence.
• Investors await the Federal Open Market Committee minutes and Australia's inflation expectations data.

The AUD/USD pair trades steadily around 0.6580 on Wednesday during the US session, after hitting a fresh low for October at 0.6556. The Australian Dollar (AUD) finds some stability against the US Dollar (USD) as investors turn cautious ahead of the release of the Federal Open Market Committee (FOMC) Minutes.

The US Dollar Index (DXY), which measures the Greenback's performance against a basket of six major currencies, has slightly retreated after reaching a two-month high at 99.05. Market participants remain cautious before the Federal Reserve (Fed) Minutes, which could provide fresh guidance on the pace of future rate cuts.

In September, the Fed reduced its benchmark rate by 25 basis points to a range of 4.00%-4.25%, while signaling two additional cuts before the end of the year. According to the CME FedWatch tool, markets still assign an over 80% chance to a 25-basis-point reduction at each of the next two policy meetings.

However, the ongoing US government shutdown continues to weigh on sentiment. The budget deadlock, now in its second week, has led to the suspension of several key economic data releases, including the Nonfarm Payrolls (NFP) report, increasing uncertainty about the outlook for US growth.

In Australia, investors await the release of one-year forward Consumer Inflation Expectations, scheduled for Thursday. In September, the survey by the Reserve Bank of Australia (RBA) showed a rise to 4.7%, reinforcing expectations that the central bank will maintain a cautious stance as inflation pressures persist.