AUD/USD is trading just above its 200-day moving average, weighed by broad US dollar strength. Australia’s Q3 wage growth, in line with expectations, supports the Reserve Bank of Australia’s decision to keep rates on hold, BBH FX analysts report.

RBA on hold, AUD outlook constructive

"AUD/USD is trading heavy just above its 200-day moving average on broad USD strength. Australia’s Q3 wage growth backs the RBA’s on hold guidance."

"The wage price index (WPI) matched consensus at 0.8% q/q vs. 0.8% in Q2 and remained steady at 3.4% y/y for a second straight quarter. The breakdown shows public sector wage growth quickened driven by state government pay rises while private sector wage growth slowed."

"Overall, annual wage growth is consistent with the RBA’s 2-3% inflation target given the bank estimates trend productivity growth of 0.9% over Q4. We remain constructive on AUD/USD. The RBA is on hold, the Fed has scope to deliver more easing, and global economic activity is resilient."