Australian Dollar declines 0.3% despite hawkish RBA remarks, as inflation concerns and growth risks weigh on sentiment.
AUD/USD fell 0.3% to near 0.6970 on Tuesday after Reserve Bank of Australia Governor Michele Bullock indicated further rate hikes remain possible. Bullock cited persistently high underlying inflation and warned demand growth may need to ease further to meet the RBA’s 2-3% target.
Markets had anticipated a modest rebound in US consumer confidence, but the Conference Board’s index dropped to 90.8 in July from 92.2 in June. Australia’s June CPI data, due Wednesday, is expected to show headline inflation rising 0.2% MoM, with annual inflation holding at 4.0%.
Despite the RBA’s hawkish stance, concerns over potential economic weakness from additional tightening weighed on the currency. Technical analysis suggests a bearish near-term bias for AUD/USD.