Despite better-than-expected monthly Retail Sales figures, AUD/USD is expected to continue its fall

The AUD/USD pair is expected to fall to about 0.6400 despite the release of weaker-than-expected monthly Retail Sales data. In spite of exceeding predictions of 0.4%, the 0.6% reading for GDP was still below the 1.3% seen in the prior period.

The Reserve Bank of Australia (RBA) will be encouraged by growing Retail Sales data when inflationary pressures are high and the bank is routinely tightening monetary policy to combat rising prices. That the RBA has already raised the Official Cash Rate (OCR) by 2.35 percentage points should not be lost on investors. For the fourth time this month, the RBA has raised the OCR by 50 basis points.

Currently, the US dollar index (DXY) is soaring after upbeat Consumer Confidence numbers were released. U.S. Conference Board stated the index of consumer sentiment rose to 108.0 from 103.6 in their prior survey. Increased optimism among American consumers is good news for the Federal Reserve (Fed) since it suggests robust demand from households. That's good news because it means the Fed can go ahead and pronounce further rate hikes.

Future attention will be fixed on Fed head Jerome Powell's public comments. It is expected that Fed policymakers will lay out the likely monetary policy actions that will be taken by the Fed in the first week of November and the middle of December. Seeing as inflationary pressures have not responded to the Fed's current rate of interest rate hikes, Powell will take a "hawkish" stance.