AUD/USD Flatlines Amid Higher Yields and Hormuz Tensions
The Australian Dollar (AUD) remained flat against the US Dollar (USD) on Wednesday despite a light economic calendar. The AUD/USD exchange rate stayed at 0.7219, unchanged from previous days.
The stability was attributed to a brief boost in the Greenback due to the US Treasury's announcement of a buyback for the September 10 auction. However, this move was short-lived as higher US yields offset the support.
The US Treasury yields ended higher in the session, with the 10-year hitting 4.845% and the 30-year rising four and a half basis points to 5.293%. The increased yields were partly due to hostilities near the Strait of Hormuz, which continued to put upward pressure on oil prices.
Looking ahead, the focus will be on Thursday's Producer Price Index (PPI) release, which is expected to rise from 0% to 0.4% MoM and from 4.7% to 5.3% annually. The Reserve Bank of Australia (RBA) Deputy Governor Hauser noted that the next meeting would focus on whether to raise interest rates following the RBA's 75-basis-point rate hike to 4.35% this year.