The Australian Dollar weakens against the Yen as traders bet the RBA will hold rates next week amid modest USD strength.
The AUD/JPY pair slips to 111.00 in early European trading, ending a two-day rally as the Australian Dollar (AUD) loses ground. Modest US Dollar (USD) strength and profit-taking after a seven-week high weigh on the AUD, while expectations of a Reserve Bank of Australia (RBA) pause next week add pressure.
Analysts at Standard Chartered expect the RBA to hold rates, citing sufficiently restrictive policy, though they warn of potential hikes in Q4 if inflation concerns persist. June’s Australian Trade Balance surplus of A$1,929 million, up from a A$1,100 million deficit, failed to support the AUD.
A softer Japanese Yen (JPY) may limit further losses for the cross, though downside risks remain as fiscal concerns persist.