Australian Dollar rises as RBA rate hike odds increase
AUD/USD continues its winning streak for the fourth successive day, trading around 0.7200 during the Asian hours on Friday. The currency pair is appreciating as the Australian Dollar (AUD) receives strong support from rising Reserve Bank of Australia (RBA) rate hike bets.
The Australian Dollar (AUD) saw a rise as the Reserve Bank of Australia (RBA) increased the odds of a rate hike. This upward movement in the AUD/USD pair, trading around 0.7200, occurred due to stronger support from rising RBA rate hike expectations. Two major banks, NAB and CBA, adjusted their forecasts, with NAB expecting the cash rate to reach 4.6% next month and CBA and ANZ anticipating a move in November.
Financial markets responded by raising the probability of a September RBA rate increase to around 50%, up significantly from 17%. Strategists at Societe Generale maintained that higher-yielding currencies, like the AUD, benefit as long as US policy keeps bond markets in check. Forex traders are now focusing on the Jackson Hole annual economic symposium, where Federal Reserve Chairman Kevin Warsh is expected to give a speech.
The AUD/USD chart is currently at 0.7200, showing a bullish near-term bias with price staying above the nine- and 50-day Exponential Moving Averages. However, support levels are located at the nine-day EMA at 0.7160 and the 50-day EMA near 0.7070.
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