The Australian Dollar gains 0.31% against the US Dollar after RBA signals potential tightening, while softer US inflation data weighs on the USD.
AUD/USD climbed to 0.7080, recovering from a Thursday low of 0.7044, as the Reserve Bank of Australia (RBA) maintained a hawkish stance. The pair rose 0.31% on the day, supported by RBA Assistant Governor Chris Kent’s remarks that further rate hikes remain possible if inflation risks resurface.
The RBA held rates steady this week but left the door open for additional tightening. Governor Michele Bullock emphasized that policymakers are awaiting more data before acting, though another rate increase is still under consideration. Meanwhile, the US Dollar weakened after softer inflation data reduced expectations for a Federal Reserve rate hike in September.
Markets now price a 34.8% chance of a Fed rate increase in September, down from 60% two weeks ago. Attention shifts to upcoming US Retail Sales data, which could influence the USD’s near-term direction.