AUD/USD: All eyes on RBA and whether a rate cut will arrive sooner than later

• AUD/USD holding out for the RBA tonight.
• Markets will be looking to the language of the statement.

AUD/USD has been consolidating ahead of the Reserve Bank of Australia and Retail Sales before the showdown event for tonight's agenda. AUD/USD is currently trading at 0.6714 having travelled between a range of 0.6734 and 0.6710, -0.28% since the Asian open in loose US Labout day markets - Markets expect the central bank to keep the cash rate on hold at 1% whereby polls are unanimous. 

A race to the bottom

It has been a race to the bottom theme throughout the summer with analysts expecting the Federal Reserve to also cut interest rates, joining the syndicate of global central banks which is helping to support the Aussie, where, otherwise, forecasts for two further cuts from the RBA could have seen AUD at the lower end of the 0.60s by now - Indeed, Tte Australian economy continues to provide additional evidence's that the central bank needs to move more into line with that of New Zealand's, with such data as poor Q2 construction and building approvals data likely to force an Oct cut if not sooner. 

Secondly, inflation, wages, and unemployment forecasts were revised downwards in August also and the heightened global uncertainty stemming from trade wars is a spanner int he works for the RBA  - There are still no further signs that the US and China are on the verge of finding any resolution to the dispute anytime soon - Markets are waiting for updates as to a meeting for this month but so far nothing...

For today, markets will be looking to the language of the statement as the RBA has indicated before that it is open to cutting the cash rate further 'if needed' but requires 'additional evidence' for it to move. If the Bank removes 'if needed' from the statement, it would suggest the Bank is inclined to cut the cash rate in Oct.

AUD/USD levels