Australian Dollar approaches two-month highs at 0.7088 with RBA decision on tap
The Australian Dollar (AUD) holds gains, in the mid-range of the 0.7000s against the US Dollar (USD) on Monday, with two-month highs of 0.7088 at hand. The Aussie is capitalising on the US Dollar’s weakness, as hopes of Federal Reserve (Fed) rate hikes wane.
The Australian Dollar (AUD) is currently trading near its two-month highs at 0.7088 against the US Dollar (USD), as the Reserve Bank of Australia (RBA) prepares to announce its monetary policy decision on Tuesday. The AUD is benefiting from the weakness in the US Dollar, which is being pressured by disappointing US job data and a possible pause in Federal Reserve (Fed) rate hikes.
Investors are cautious and will closely examine the RBA's policy statement and Governor Bullock's press release to gauge the likelihood of further rate hikes in the coming months. Recent inflation data shows the RBA Trimmed Mean CPI rose to 3.6% in June, slightly above market expectations of 3.7%. Despite this, there is some uncertainty about the bank's intentions to continue tightening its monetary policy after three consecutive hikes in 2026.
Meanwhile, the US Dollar remains under pressure, particularly due to the weak employment figures released by the US Bureau of Labor Statistics. Markets are pricing a 44% chance of an interest rate hike in September, down from the previous week's 67%, as investors adjust their expectations based on the RBA's upcoming decision.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.
