The Reserve Bank of Australia (RBA) kept its interest rate at 4.35% during the September meeting. While the RBA acknowledged inflationary risks, Governor Michele Bullock emphasized that there are no immediate plans to raise interest rates. Additionally, Deputy Governor Sarah Hunter mentioned that the RBA is closely monitoring data to assess whether inflation will ease.

Currently, investors anticipate a 50% chance that the RBA will cut interest rates by 25 basis points (bps) by the end of the year. It is also expected to be the last central bank among the G10 group to reduce rates.

Although a potential interest rate cut by the U.S. Federal Reserve may help AUD/USD recover towards the end of the year, uncertainties surrounding the economic outlook and China's stimulus measures remain major challenges. If the Chinese government continues to introduce stimulus measures, investors may shift their focus increasingly towards the Chinese market.

Source: Fxstreet