The Australian dollar (AUD) continued to weaken on Thursday. The strengthening US dollar (USD) amid growing speculation of a 25 basis point (bps) interest rate cut by the Federal Reserve (Fed) in November weakened the Australian dollar. Furthermore, Beijing's efforts to stimulate the world's second-largest economy disappointed investors as China's top economic planning authority failed to announce additional measures to reverse slowing growth. It is worth noting that China is Australia's top trading partner, and concerns about a sluggish Chinese economy tend to weigh on the AUD.

Investors will be closely watching the US Consumer Price Index (CPI) inflation data due on Thursday. The US headline CPI is expected to show an increase of 2.3% YoY in September, while core CPI inflation is expected to show an increase of 3.2% YoY in the same reporting period. However, a weaker-than-expected reading could open the door to a major interest rate cut by the Fed, which could weigh on the USD and limit the downside for AUD/USD.

Source : FXstreet