Australian Dollar softens to near 0.7000 on hawkish Fed signals, RBA rate decision looms
The AUD/USD pair loses momentum to near 0.7010 during the early Asian session on Monday. The US Dollar (USD) strengthens against the Australian Dollar (AUD) on rising US Treasury yields and growing bets on further Federal Reserve (Fed) interest rate hikes.
The Australian Dollar (AUD) has softened to near 0.7000 against the US Dollar (USD) due to hawkish signals from the Federal Reserve (Fed) and the upcoming rate decision by the Reserve Bank of Australia (RBA). Rising US Treasury yields and increasing expectations of further Fed interest rate hikes have contributed to the strengthening of the USD against the AUD.
The RBA is expected to raise rates by 25 basis points, potentially bringing the Official Cash Rate to 4.60%, the highest level since November 2011. Traders will closely monitor Governor Michele Bullock's press conference for further insights into the central bank's stance on monetary policy. The mixed labor force data and the possibility of additional RBA hikes support the AUD/USD pair, while Australia's exposure to commodities linked to energy, AI, and defense provides a long-term tailwind for the currency.
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