Australian Dollar retreats from highs as Warsh’s hawkish message lifts US Dollar
AUD/USD retreats 0.30% on Friday to trade around 0.7170 at the time of writing, correcting after reaching its highest level since mid-May at 0.7206 earlier in the day.
The Australian Dollar (AUD) retreated from its May highs, trading around 0.7170 against the US Dollar (USD) following remarks by Federal Reserve Chair Kevin Warsh. Warsh's hawkish comments emphasized the need for the central bank to focus on price stability and highlighted that inflation data so far had not been sufficient to demonstrate a significant shift in underlying price dynamics.
Markets reacted to Warsh's speech, with a 60% chance now assigned to an interest-rate hike at the Fed's September meeting, up from roughly 36% prior to his remarks. The Australian Dollar found support from the Reserve Bank of Australia's (RBA) outlook, which expects at least four interest-rate hikes before the end of the year due to elevated consumer prices.
Both central banks face persistent inflation pressures, keeping AUD/USD caught between their competing monetary policy forces. Technical analysis indicates a modest bullish bias for AUD/USD, trading near 0.7166 and supported by the 100-period and 200-period simple moving averages, as well as rising trend-line support. The RSI has normalized, suggesting consolidation above structural floors while the pair probes overhead barriers.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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