Traders scaled back rate hike bets after US inflation figures aligned with expectations, weighing on the Australian Dollar.
The Australian Dollar retreated against the US Dollar on Wednesday, closing at 0.7061 USD, down from earlier levels. The pullback followed US inflation data that matched both headline and core estimates, reducing expectations for aggressive Federal Reserve tightening.
Prior to the release, markets had priced in a higher probability of rate hikes, but the data tempered those bets. The AUD/USD pair initially dipped further before stabilizing near the session low. No immediate market reaction was reported beyond the currency movement.
The decline reflects broader sentiment shifts tied to US monetary policy, with traders reassessing the outlook for global interest rates.