AUD/USD Holds Steady at 70c Ahead of RBA Decision

The Australian dollar has held steady at around 70c against the US dollar ahead of the Reserve Bank of Australia's (RBA) interest rate decision and inflation data release. The RBA is expected to hike interest rates by 25 basis points, which would be its fifth hike this cycle. However, the employment report last week complicated the picture, showing a significant increase in part-time jobs but a decline in full-time positions.

The US dollar index has reached a two-month high, sending AUD/USD to just shy of 70c and down for a third consecutive week. The RBA's decision is expected to provide guidance on future interest rate hikes, with the central bank likely to retain the threat of further hikes without committing to additional increases.

The US data releases this week will also be closely watched, including PCE inflation, nonfarm payrolls, and ISM manufacturing. These figures will influence market expectations for the Federal Reserve's next interest rate hike, which is expected in November or December. The strong correlation between AUD/USD and DXY (the US dollar index) suggests that further dollar strength could remain a headwind for the Australian dollar.