RBA officials signal potential rate hikes, lifting AUD/USD to 0.7070 while softer US PPI data weighs on the USD.
The Australian Dollar rose against the US Dollar on Friday, trading near 0.7070 after hitting Thursday’s low of 0.7045. RBA Assistant Governor Chris Kent stated inflation risks remain elevated, keeping near-term tightening on the table. This follows the central bank’s hawkish hold earlier in the week, with Governor Michelle Bullock indicating a rate hike is still under consideration.
The USD weakened after softer-than-expected US Producer Price Index data reinforced expectations of moderating inflation. July’s Nonfarm Payrolls decline and benign CPI figures earlier in the week further reduced bets on a Federal Reserve rate hike in September. Markets now await July’s US Retail Sales report for further direction.
AUD/USD’s move reflects diverging monetary policy outlooks, with the RBA maintaining a hawkish stance while Fed tightening hopes fade.