AUD/USD drops below 0.6300 following RBA’s Bullock speech

• AUD/USD extends its downside following RBA Governor Bullock's speech.
• Reserve Bank of Australia (RBA) Governor said CPI was higher than expected, but was about where it would come.
• The September’s US New Home Sales rose to 759,000 MoM, above the market consensus of 680,000.
• Market players await the first US Q3 Gross Domestic Product estimate, Initial Jobless Claims, and Durable Goods Orders.

The AUD/USD pair attracts some sellers during the early Asian trading hours on Thursday. The pair breaks below the 0.6300 mark and currently trades around 0.6290, losing 0.28% for the day. The risk-off sentiment and a firmer US Dollar (USD) exert pressure on the pair.

Early Thursday, Reserve Bank of Australia (RBA) Governor Michele Bullock stated that CPI was a little higher than expected, but it was about where we thought it would come. Bullock added that the central bank aims to slow the economy without tipping it into recession.

The Australian Consumer Price Index (CPI) arrives at 1.2% QoQ in the third quarter of 2023 versus the 0.8% increase seen in the second quarter. The market consensus was for a rise of 1.1% in the reported period. On an annual basis, CPI inflation rose to 5.4% in Q3 2023, against the expected 5.3% increase and the previous print of 6.0%.

On the US Dollar front, September’s New Home Sales in the US increased to 759,000 MoM, above the market consensus of 680,000. The upside of the Greenback is bolstered by the higher US Treasury yields and a risk-off mood. Meanwhile, the US Treasury bond yields edge higher, with the 10-Y US Treasury yield surging to 4.96%.

Additionally, geopolitical risks will continue to boost safe-haven flows. Early Thursday, Prime Minister Benjamin Netanyahu said Israel is preparing for a ground assault in Gaza and the timing of the invasion will be reached by consensus.

Moving on, the Australian Export and Imports Price Index for the third quarter (Q3) is scheduled to be released in the Asian session on Thursday. Market participants will closely monitor the first Q3 Gross Domestic Product estimate on Thursday, which is expected to show a 4.2% expansion. Also, Initial Jobless Claims and Durable Goods Orders will be released.