RBA’s Hauser signals potential rate hikes if inflation persists, but the Australian dollar extends losses for a second day.
AUD/USD declined to 0.7080 in Asian trading on Wednesday, marking a second consecutive day of losses. Reserve Bank of Australia Deputy Governor Andrew Hauser warned that inflation remains too high, requiring monetary policy to curb demand and reduce price pressures. While the RBA does not expect a recession, it remains concerned about inflation risks and may raise rates if necessary.
Australia’s Wage Price Index rose 3.2% year-on-year in Q2 2026, matching expectations but marking the slowest growth since Q4 2024. Quarterly wages grew 0.8%, consistent with the prior four quarters. Analysts at UOB Group maintain a bullish near-term outlook, lifting their focus to 0.7150 after the currency briefly surpassed 0.7120.
Despite hawkish rhetoric, the Australian dollar showed limited upside, reflecting broader market sentiment and mixed economic signals.