The Australian dollar (AUD) moved cautiously as markets weighed the effects of the US government shutdown, which delayed the release of important macro data and obscured visibility ahead of the Fed's decision. The lack of data has led market participants to rely again on signals from Treasury yields and the direction of the DXY; if US yields soften and the dollar loses traction, the AUD has room to strengthen, but any risk-off episodes tend to pressure high-beta currencies like the Aussie.

Domestically, the focus is on the RBA early next week to read the latest policy tone: whether the central bank continues to emphasize the risks of services inflation and wage dynamics, or allows for a longer pause. The strength of increasingly layered household demand (housing, services), versus weakness in some goods sectors, will influence the RBA's assessment of inflation persistence. At the same time, the commodity channel remains crucial: fluctuations in iron ore prices and the Chinese recovery narrative, including property policy and PMI signals, are driving AUD sentiment through the trade channel.

In the near term, the scenario map is relatively balanced. Pro-AUD scenario: The RBA's tone tends to be tight, US yields decline, and global sentiment improves. AUD/USD has the potential to test higher levels. Counter-AUD scenario: US political tensions prolong uncertainty, the DXY rebounds, or commodity prices slip. The Aussie is vulnerable to a correction. Monitor a combination of three factors: the RBA statement, the direction of US yields, and Chinese headlines to determine the next momentum.

Source: Newsmaker.id