Expectations of multiple Federal Reserve rate increases this year weigh on the Australian Dollar, pushing AUD/USD lower.
The Australian Dollar (AUD) slipped to 0.7003 against the US Dollar (USD) in European trading, pressured by a stronger Greenback. The US Dollar Index (DXY) rose 0.1% to near 100.90 as markets price in at least two Federal Reserve rate hikes in 2024.
Bank of America analysts forecast three 25 basis point hikes in September, October, and December, citing persistent core inflation and strong jobs data. The shift follows earlier expectations of no rate changes this year. Investors now await Australia’s May CPI and employment data due later this week.
Technical indicators suggest further downside for AUD/USD, with the pair trading below key moving averages and the Relative Strength Index (RSI) at 37, signaling bearish momentum.