Australian Dollar remains subdued as Fed and RBA hawks collide
The Aussie Dollar is poised to end Tuesday’s session unchanged versus the Greenback amid renewed hopes for an end of the Middle East conflict, while Federal Reserve officials struck a hawkish tone in their speeches. The AUD/USD trades at 0.7114, near Tuesday’s opening price.
The Australian Dollar is expected to close Tuesday's trading session flat against the US Dollar, with traders awaiting the Reserve Bank of Australia's (RBA) rate decision. Geopolitical developments, including the potential end to the Middle East conflict, have tempered hopes of AUD strengthening. Fed officials expressed a more hawkish stance, with Richmond Fed President Thomas Barkin suggesting that inflation could require additional rate hikes to reach its 2% target.
The US economy demonstrated strength, as the ADP Employment Change 4-week average increased to 20K from 16.75K. However, RBA Governor Bullock warned of upside risks to inflation due to high energy prices, and Assistant Governor Sarah Hunter indicated the possibility of further interest rate increases if inflation becomes entrenched.
Technical analysis suggests the Australian Dollar holds a mildly bullish bias in the short term, with support levels at 0.7115 and resistance at 0.7198.
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