AUD Holds Firm Amid Hawkish Expectations

The Australian Dollar remains steady as markets weigh hawkish expectations from both the Reserve Bank of Australia (RBA) and Federal Reserve (Fed). The AUD/USD pair trades around 0.7167, with a modest pullback in the US Dollar helping cushion the downside.

Following Chair Kevin Warsh's speech at the Jackson Hole symposium on Friday, Fed rate hike bets regained traction. The CME FedWatch Tool now shows a 65% probability of a 25-basis-point (bps) increase at next month's meeting.

The US Dollar Index (DXY) traded around 99.41, down 0.27% on the day. However, expectations of tighter monetary policy should keep the dollar supported, with attention now turning to US labor market data due this week.