AUD Stalls Below 0.7170 as Traders Bet on US Rate Hike

The Australian Dollar (AUD) has stalled at around 0.7160 against the US Dollar (USD), failing to break above the 0.7170 level after a rebound from lows near 0.7120 on Wednesday.

This comes as traders remain cautious about betting against the US Dollar, following hawkish comments from Federal Reserve Chairman Kevin Warsh at the Jackson Hole summit last week, which boosted expectations of an interest rate hike at the central bank's September 16 meeting.

Strategists at Scotiabank note that markets are now pricing a 70% chance of the Fed raising rates by 25 basis points later this month, further supporting the Dollar's strength in a risk-off tone.

In Australia, the trade surplus narrowed by 418 million to 1.923 billion in July, while exports declined 3.3% after a 9.1% jump in June, offsetting a 2.5% drop in imports.