The Australian dollar, paired with the US dollar, is weakening again. The current exchange rate for AUDUSD stands at 0.6379.
The primary driver influencing the Australian exchange rate is the behaviour of the US Dollar.
However, interestingly, there is a factor that could potentially help stabilise the AUD: inflation data. The consumer price index in Australia is on the rise, maintaining the possibility of further interest rate increases.
By the end of August, the country's inflation had surged by 5.2% y/y, completely offsetting the gradual decline in price pressures seen over the past three months.
With inflation on the rise again, the Reserve Bank of Australia (RBA) has a compelling case for considering another rate hike before the end of the year. The current rate stands at 4.1% per annum, and it has remained unchanged during the last three meetings.
The Reserve Bank of Australia will convene next week. This marks the first meeting under the leadership of the new head of the RBA, Michele Bullock.