Australian Dollar advances due to hawkish comments from RBA Governor Bullock
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The Australian Dollar appreciates as the RBA may increase rates again if needed. The safe-haven flows may limit the upside of the AUD amid escalated Middle-East tensions. Fed Governor Michelle Bowman suggested that the US central bank may not be prepared to cut rates in September. The Australian Dollar (AUD) retraces its recent losses against the US Dollar (USD) on Monday. The AUD/USD pair appreciates due to the hawkish sentiment surrounding the Reserve Bank of Australia (RBA). Additionally, the upbeat inflation in China, a close trade partner with Australia, might have provided support for the Aussie Dollar. RBA Governor Michele Bullock highlighted last week the importance of remaining cautious regarding inflation risks and expressed that the central bank will not hesitate to raise rates again to combat inflation if needed. Those comments came just days after the RBA held rates steady at 4.35% for the sixth straight meeting. On the USD front, market expectations for a potential interest rate cut by the Federal Reserve (Fed) in September could put pressure on the US Dollar (USD), potentially providing support for the AUD/USD pair. Investors will likely focus on US producer inflation data set to be released on Tuesday and consumer inflation figures on Wednesday. Traders are looking for confirmation that price growth remains stable. Daily Digest Market Movers: Australian Dollar rises due to a hawkish RBA The upside of the risk-sensitive AUD could be restrained due to safe-haven flows amid increased geopolitical tensions in the Middle East. On Sunday, Defense Minister Yoav Gallant informed US Defense Secretary Lloyd Austin that Iran’s military activities indicate preparations for a significant strike on Israel, as reported by Axios writer Barak Ravid. On Sunday, Federal Reserve Governor Michelle Bowman stated that she continues to see upside risks for inflation and ongoing strength in the labor…
Filed under: News - @ August 12, 2024 2:24 am