Australian Dollar climbs on RBA rate hike expectations as traders await US CPI
AUD/USD advances 0.17% on Friday and trades around 0.7170 at the time of writing. The Australian Dollar (AUD) benefits mainly from growing expectations of further interest rate hikes by the Reserve Bank of Australia (RBA), following a series of hawkish comments from central bank officials.
The Australian Dollar (AUD) rose 0.17% on Friday, trading near 0.7170 as markets anticipated further interest rate increases by the Reserve Bank of Australia (RBA). Assistant Governor Sarah Hunter suggested another hike at the September meeting if inflation remains stubborn, while Deputy Governor Andrew Hauser emphasized that inflation remains a significant challenge.
The RBA's outlook was re-evaluated, with the chance of a rate hike rising from 54% to 72%. The US Producer Price Index (PPI) expanded 5.4% year-over-year in August, surpassing expectations, while the monthly PPI rose 0.4%, slightly below forecasts. This strong inflation data in the US furthered expectations of monetary tightening there, with the CME FedWatch tool indicating a 70% probability of a 25-basis-point interest rate hike at the Fed's next meeting.
Investors now focus on the upcoming US Consumer Price Index (CPI), expected to show a 3.4% year-over-year increase and a 2.4% rise in core inflation. The AUD/USD pair hovers around 0.7171, hovering under key moving averages but attempting to stabilize after breaching a descending channel. Resistance lies at 0.7176, while support is found near 0.7162, with a more significant floor at 0.7150.
Technical analysis indicates modest upside momentum, with broader pressure still influencing the market.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
