The AUD/USD pair remained below the 0.7000 handle and hovered near a two-week low as traders positioned ahead of the Reserve Bank of Australia's upcoming monetary policy decision. The primary transmission channel is the interest rate differential between Australia and the United States: expectations for RBA policy relative to Federal Reserve policy directly shift the relative yield attractiveness of AUD-denominated versus USD-denominated assets, and any perceived dovish tilt from the RBA tends to weigh on the Aussie. The Australian dollar, being a high-beta, commodity-linked currency, is most exposed to this repricing, while the US dollar's reaction is more muted and depends on the broader Fed outlook and general risk sentiment. The key event for traders to watch is the RBA rate decision and the accompanying policy statement, particularly any guidance on the inflation outlook and labour market conditions that could alter the path of future rate cuts or holds.
AUD/USD Price Forecast: Holds below 0.7000, near two-week low ahead of RBA decision
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