AUD Traders Await Crucial Data as Rate Hike Fears Persist
The Australian Dollar (AUD) has had an uneventful start to the week, unable to sustain gains above the 0.7100 level as investors remain cautious about the US Federal Reserve's plans for further interest rate hikes.
This lack of direction comes amidst a strong start to the week for the US Dollar (USD), which continues to attract safe-haven demand due to concerns over geopolitical tensions, particularly between Russia and NATO.
The Reserve Bank of Australia (RBA) has maintained its hawkish policy bias, supported by elevated inflation in the country. Despite some softening in momentum, Australia's economy remains robust, with domestic demand and positive economic growth contributing to its favorable position compared to other G10 peers.
The RBA is expected to keep a close eye on upcoming data releases before its September meeting, including GDP, labor market, and inflation figures. Investors are currently pricing in just over 41 basis points of tightening by year-end and expect the RBA to hike the OCR by 25 basis points at its meeting on September 29.