AUD Strengthens on RBA Hawkish Comments, Terminal Rate Projected to Hit 4.85%

The Australian Dollar strengthened on Friday following hawkish comments from Reserve Bank of Australia (RBA) officials.

Deputy Governor Bullock highlighted that the central bank's inflation concerns have materialized, potentially forcing another interest rate increase. This reinforced market expectations for a fourth rate hike this year at the RBA's late-September meeting.

Analysts at UBS now project two additional hikes, bringing the terminal rate to 4.85%. However, strategists at UOB Group maintain a bearish medium-term bias on the AUD, expecting it to drop to 0.7050 after breaking below 0.7100.