Australian dollar holds near highs as 70% RBA hike odds persist

The Australian dollar remained firm against major currencies on Thursday, with AUD/USD hovering around 0.67 near recent highs. Australia added 35,000 jobs in May, beating forecasts for 20,000, while unemployment fell to 3.9%. Although wage growth came in slightly below expectations and consumer confidence weakened as borrowing costs rose, money markets still assign a 70% chance of a 25-basis-point Reserve Bank of Australia (RBA, Australia's central bank) rate increase at its August meeting and expect the cash rate to reach 4.35% by year-end. Governor Michele Bullock said the board "will not hesitate" to raise rates further if inflation remains above the 2-3% target band. Trimmed mean inflation, the RBA's preferred measure, was 4.0% in the first quarter. The currency has also benefited from a softer US dollar, expectations that the US Federal Reserve may pause its tightening cycle, weaker-than-expected US manufacturing data and iron ore prices near $120 per tonne. Traders will watch upcoming inflation data and RBA communications, while a dovish policy shift or deterioration in global risk sentiment could reverse the Australian dollar's gains.

The information on this website is generated using AI and we cannot guarantee its accuracy. Please use it as reference information only.
Australian dollar holds near highs as 70% RBA hike odds persist - CoinPost Terminal