AUD/USD Hovers Higher As RBA’s Hawkish Outlook Grows

The Australian dollar moved higher on Wednesday, likely supported by the Reserve Bank’s hawkish sentiment to keep interest rates higher this year. Last week, RBA Governor Bullock said the central bank was ready to raise interest rates if the Consumer Price Index (CPI) did not return to its target range of 1%-3%, NCA NewsWire reported.

The Australian dollar could be in trouble as China’s consumer inflation data released on Wednesday was weaker than expected. China’s annual inflation rose 0.3% in May, lower than the expected 0.4%. China’s monthly inflation rate was recorded at -0.1%, compared with a rise of 0.1% in April.

The US dollar (USD) remained strong, supported by strong US employment data in May. This development reduced the probability of two interest rate cuts by the Federal Reserve (FED) in 2024. The CME FedWatch tool showed that the probability of the Fed cutting interest rates by at least 25 basis points in September fell to 52% from 67% a week ago.

Investors adopted a cautious approach ahead of the Fed’s policy decision and the release of key US inflation data in the late US session. The Fed is expected to keep interest rates stable between 5.25% and 5.50% to push inflation towards its target of 2%. The annual rates of overall and core inflation in the United States are expected to reach 3.4% and 3.5% respectively in May.

AUD latest articles

Popular exchange rates

foreign exchange

fxcurrencyconverter is a forex portal. The main columns are exchange rate, knowledge, news, currency and so on.

© 2023 Copyright