The Australian Dollar appreciates as the RBA is widely expected to adopt a hawkish stance on its policy outlook.
RBA's Bullock emphasizes to remain cautious regarding inflation risks and expressed readiness to raise rates if necessary.
CME FedWatch tool suggests 100% odds of a 25-basis point Fed rate cut in September.
The Australian Dollar (AUD) edges lower as the US Dollar (USD) advances further following the recent US Initial Jobless Claims, which eased in the previous week. However, the AUD/USD pair gained ground following the hawkish comments from Reserve Bank of Australia (RBA) Governor Michele Bullock on Thursday.
Governor Bullock highlighted the importance of remaining cautious regarding inflation risks and expressed readiness to raise rates if needed, noting that inflation might not fall back to the 2–3% target range until late 2025. Additionally, the Aussie Dollar saw gains following the RBA's assertive choice to keep the cash rate at 4.35% on Tuesday.
The upside of the US Dollar could be restrained as the US Federal Reserve (Fed) is widely anticipated to implement a rate cut in September. According to the CME FedWatch tool, markets are now fully pricing in a quarter-basis point interest rate cut by the Fed in September.
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