AUD/USD Falls as Markets Question RBA Hawkishness

The Australian Dollar (AUD) has fallen to near 0.7050 against the US Dollar (USD), extending Wednesday's correction after revisiting a two-month high near 0.7090.

Financial markets seem unconvinced by the Reserve Bank of Australia's (RBA) hawkish remarks on Tuesday, when it left its Official Cash Rate (OCR) unchanged at 4.35% and emphasized the need to raise interest rates further due to upside inflation risks.

Analysts at Standard Chartered note that Governor Bullock 'talked up the uncertainty around the RBA's central forecasts' and did not rule out the need for more policy tightening in the immediate future if demand does not slow sufficiently or if energy prices revisit recent highs.