Australian Dollar declines as US Dollar continues strengthening

• AUD/USD continues its decline, nearing August lows.
• US headline inflation accelerated to 2.6% in October from 2.4% in September, while core CPI grew by 3.3%.
•  Australia's October employment data is expected to show a modest increase in jobs added.

The AUD/USD declined by 0.69% to 0.6490 in Wednesday's session. AUD/USD hovers slightly below 0.6500 after the US inflation data for October. The US headline inflation and core CPI showed no surprises, while focus now shifts to Australia's October employment data is expected to show a modest increase in jobs added. 

The Australian dollar has declined due to the strength of the US dollar, supported by positive economic indicators and increased confidence. Australia's central bank maintains a neutral stance, signaling a potential rate cut in mid-2025, providing support for the Aussie. 

Daily digest market movers: Australian Dollar down ahead employment data, US CPI

• The US headline inflation accelerated to 2.6% in October, while the core CPI grew by 3.3%.
• The inflation report didn't shake the expectations among investors which continue to bet on another cut in December.
• On the other hand, the RBA is expected to keep interest rates unchanged this year despite rising inflationary pressures.
• Markets do not anticipate a 25 basis point rate cut by the RBA until May 2025.
• Datawise, the Australian economy is projected to have added 25,000 new jobs in October, and the unemployment rate is expected to remain at 4.1%.
• Australian data might shake up the expectations on the timetable of the RBA's easing cycle.

AUD/USD technical outlook:  Pair approaches lows since August, oversold signals loom

The AUD/USD pair has extended its decline below the 0.6500 level, reaching its lowest point since August. This move is supported by technical indicators, which remain deeply in negative territory. The Relative Strength Index (RSI) is near 30, indicating oversold conditions, while the Moving Average Convergence Divergence (MACD) is below zero, suggesting bearish momentum. These signals suggest that the downtrend may continue in the near term.