The Australian Dollar could lose ground by receiving pressure from a hawkish speech by a Fed member.
Fed member Dr. Adriana Kugler indicated to maintain rates for longer if upcoming data does not confirm a slowdown in inflation.
Australia’s 10-year government bond yield steadies around 4.2%, its lowest level in three weeks.
The Australian Dollar (AUD) experiences volatility on Wednesday. The AUD/USD pair has faced challenges due to a modest rebound in the US Dollar (USD), which is likely influenced by a hawkish speech from Federal Reserve (Fed) Board of Governors member Dr. Adriana Kugler on Tuesday.
In her remarks, Dr. Kugler acknowledged that inflationary pressures have eased but emphasized that the Fed still needs additional data to justify a rate cut. Kugler indicated that if upcoming data does not confirm that inflation is moving toward the 2% target, it may be appropriate to maintain current rates for a while longer.
The AUD/USD pair loses ground as investors reduce their expectations for a Reserve Bank of Australia (RBA) rate hike. Despite this, the central bank is still anticipated to delay joining the global rate-cutting cycle. Investors are now focused on Australian employment numbers, due on Thursday, to gain further insights into the monetary policy outlook.
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