AUD Holds Firm as RBA Hike Bets Surge Amid US Inflation Concerns

The Australian Dollar (AUD) has held firm against its US counterpart despite rising bets of further interest rate hikes by the Reserve Bank of Australia (RBA).

RBA officials, including Assistant Governor Sarah Hunter and Deputy Governor Andrew Hauser, have recently made hawkish comments, indicating that the central bank may need to raise interest rates again if inflation proves more persistent than expected.

This has boosted expectations of a rate hike at the September meeting, with markets now seeing a 72% chance that the RBA will raise its Official Cash Rate (OCR) to 4.6%, up from 54% at the beginning of the month.

The Producer Price Index (PPI) in the US rose 5.4% YoY in August, slightly above market consensus, and reinforced expectations of monetary tightening in the United States.