Australian Dollar Outlook: AUD/USD, US Dollar Index, and Key Factors

1. What is driving the AUD/USD decline despite RBA caution?

The AUD/USD is declining primarily due to broader US dollar strength (reflected in the US Dollar Index) and market expectations of potential RBA rate cuts. Despite the RBA's cautious stance, risk-off sentiment and weaker commodity prices are weighing on the Aussie dollar.

2. How are RBA rate cut bets influencing the Australian dollar's trajectory?

Growing speculation about RBA rate cuts in 2024 is putting downward pressure on the AUD. Markets are pricing in a dovish shift amid softer inflation data, reducing the interest rate differential advantage that previously supported the currency.

3. What technical and economic factors are critical for AUD/USD in October?

Key technical levels include support at 0.6300 and resistance near 0.6500. Economically, US CPI data, China's recovery (Australia's top trade partner), and commodity price trends (especially iron ore) will be decisive. The US Dollar Index (DXY) movement remains a major counterweight.