AUD Rebounds as Markets Eye RBA Rate Hike and Fed Expectations
The Australian Dollar has regained some ground against the US Dollar after a sharp decline over the previous two trading sessions. In European hours, AUD/USD inched higher towards 0.7020, having found support around 0.7000.
Market participants are looking ahead to the Reserve Bank of Australia's (RBA) upcoming monetary policy announcement on Tuesday, which is seen as the next key catalyst for AUD/USD. Strategists at Brown Brothers Harriman highlighted that recent domestic data have strengthened expectations for additional policy tightening.
Australia's August labor force figures supported the case for an RBA rate increase, with the economy adding more jobs than expected. According to BBH, 'Australia's August labor force report reinforced the case for a 25bps RBA hike to 4.60% next week (90% priced-in)', after the economy 'added more jobs than expected (actual: +39.5k, consensus: +20k, prior: -15.9k) driven by part-time employment (+45.8k vs. -30.8k in July).'