Australian Dollar edges lower, while US Dollar appreciates on hawkish Fedspeak
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The Australian Dollar loses ground as RBA Deputy Governor Hauser advises against formulating policy based on a single inflation report. Australia’s high inflation has fueled speculation that the RBA might raise interest rates again in August. The US Dollar appreciates due to higher yields ahead of Friday’s release of Core PCE inflation. The Australian Dollar (AUD) depreciates against the US Dollar (USD) on Friday, which could be attributed to the dovish comments from the Reserve Bank of Australia’s (RBA) Deputy Governor Andrew Hauser. Hauser said it would be a “bad mistake” to formulate policy in response to a single inflation report. He emphasized that there is still a suite of economic data to come that will require detailed analysis, per Bloomberg. The AUD gained ground after releasing May’s higher-than-expected Monthly Consumer Price Index (CPI). The persistently high inflation has fueled speculation that the RBA might raise interest rates again in August. The US Dollar (USD) gains ground due to higher yields on US Treasury bonds. Friday’s Core PCE Price Index inflation is projected to decrease YoY to 2.6% from the previous 2.8%. This data is seen as the Federal Reserve’s (Fed) preferred inflation gauge. Daily Digest Market Movers: Australian Dollar declines due to hawkish Fedspeak Australia’s 10-year government bond yield surged above 4.4%, reaching a three-week high, as a hot inflation reading fueled fears that the Reserve Bank of Australia might raise interest rates again in the next meeting in August. Federal Reserve (Fed) Board of Governors member Michelle Bowman noted on Thursday that she is still not ready to support a central bank rate cut with inflation pressures still elevated. Bowman said, adding “We are still not yet at the point where it is appropriate to lower the policy rate, and I continue to see a number of upside risks to…
Filed under: News - @ June 28, 2024 5:18 am