AUD/USD settled in a tight range just above 0.7500 as the market settled down post CPI and FOMC. With the RBA on Tuesday the market will by unlikely to rally sharply ahead of a potential interest rate cut. The USD is on the backfoot post FOMC though so that is supporting the AUD/USD on dips and now the market is looking to the Bank of Japan for the next inspiration.
The Bank of Japan meeting is likely to conclude by 3pm today Australian time and expectations are high for a rate cut and/or expansion of the Asset purchase program. The USD/JPY is extremely volatile in the last 24 hours with rumors of government pressure on the BOJ spooking the market this morning. USD/JPY was as high at Y107.50 last week and touched Y103.30 this morning.
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