The AUD/USD pair is holding onto gains near the 0.6600 level as the US Dollar weakens ahead of the US presidential elections and the Reserve Bank of Australia’s (RBA) monetary policy decision.
The US Dollar Index (DXY) has declined significantly, driven by a recent poll showing Vice President Kamala Harris gaining ground against former President Donald Trump. A potential Harris victory is seen as less supportive of the US Dollar compared to a Trump win, which could boost inflationary pressures and strengthen the greenback.
The Federal Reserve is also expected to cut interest rates on Thursday, but at a slower pace of 25 basis points. This could further weaken the US Dollar.
On the other hand, the Australian Dollar is awaiting the RBA’s policy decision. The central bank is expected to keep interest rates unchanged at 4.35%, but investors will be watching for clues about future policy direction.
