Australian Dollar Attempts Rebound
The Australian dollar rose above $0.71, attempting to recover from a recent four-week low as hawkish comments from the Reserve Bank’s top official reinforced expectations for further policy tightening. Governor Michele Bullock said upside inflation risks were materializing and warned that higher costs could make inflation more persistent, pointing to the Middle East conflict, rising energy prices and stronger domestic cost pressures. Prior to the testimony, swaps markets priced at least two more rate hikes by the February meeting, with a roughly 87% chance the first occurs on September 29. That marks a notable shift from the start of September, when traders were pricing just one further hike, likely by year-end. The Aussie also benefited from a softer US dollar, alongside lower Treasury yields and easing oil prices, while a rebound in global equities provided additional support for the risk-sensitive currency.
71, attempting to recover from a recent four-week low as hawkish comments from the Reserve Bank’s top official reinforced expectations for further policy tightening. Governor Michele Bullock said upside inflation risks were materializing and warned that higher costs could make inflation more persistent, pointing to the Middle East conflict, rising energy prices and stronger domestic cost pressures. Prior to the testimony, swaps markets priced at least two more rate hikes by the February meeting, with a roughly 87% chance the first occurs on September 29.
That marks a notable shift from the start of September, when traders were pricing just one further hike, likely by year-end. The Aussie also benefited from a softer US dollar, alongside lower Treasury yields and easing oil prices, while a rebound in global equities provided additional support for the risk-sensitive currency.