AUD/USD trades to a fresh monthly low (0.7274) as US Retail Sales unexpectedly increases 0.7% in August, and the exchange rate may face a further decline ahead of the Federal Open Market Committee (FOMC) interest rate decision on September 22 as the central bank appears to be on track to scale back monetary support.
The FOMC may layout a tentative exit strategy as the rise in household consumption indicates a robust recovery, and the update to the Summary of Economic Projections (SEP) may heighten the appeal of the US Dollar if Fed officials show a greater willingness to normalize monetary policy sooner rather than later.
Meanwhile, the Reserve Bank of Australia (RBA) seems to be on a preset course as the central bank plans to carry out its government bond purchase program at a pace of A$4B a week “until at least mid February 2022,” and Governor Philip Lowe and Co. may keep the door open to further support the economy as job growth contracts for the second time this year.
