AUD Slides Despite RBA Hawkishness as Global Economic Concerns Rise

The Australian Dollar (AUD) continued to lose ground on Tuesday, dipping around 0.3% below $0.6970 as it came under pressure despite Reserve Bank of Australia Governor Michele Bullock's hawkish comments.

Bullock emphasized that underlying inflation remains too high and stated that 'some further easing in the growth of demand is likely to be required' to return inflation sustainably to the RBA's 2%, 3% target. She also warned that the Board remains prepared to act, including by increasing the cash rate further if needed.

Normally, higher interest rates would support the Aussie, but concerns about additional tightening weakening domestic activity and the labor market weighed on the currency.

In related news, the Conference Board Consumer Confidence Index in the United States declined to 90.8 in July from an upwardly revised 92.2 in June. Attention now turns to Australia's June Consumer Price Index, which is expected to rise 0.2% MoM with annual inflation forecast to remain elevated at 4.0%.

Technical analysis suggests that the AUD/USD pair maintains a bearish near-term bias as it holds beneath both the 100-period Simple Moving Average (SMA) and the 20-period SMA, with nearby overhead barriers suggesting rallies are likely to be sold into for now.