AUD Steadies as Hawkish RBA Minutes Offset Soft US Dollar
The Australian Dollar has steadied around the mid-0.7100s after the Reserve Bank of Australia (RBA) released its July meeting minutes, which were perceived as hawkish.
The RBA board members think another rate hike may still be needed due to inflation risks tilted to the upside, with rising oil prices and broad cost pass-throughs flagged as sources of concern.
However, others pointed out offsetting downside risks. The futures market now prices in a slightly higher than 60% chance of a further move before year-end, up from last week's figure.
The Australian Dollar's recovery came after the US Treasury decided to at least double its buyback operations for longer-dated bonds, weighing on the Greenback and contributing to a soft US Dollar. This has lent support to the AUD/USD pair.