AUD/USD Slips Below 0.70 Amid Dovish RBA Comments
The Australian Dollar slipped below 0.70 against the US Dollar on Wednesday, despite softer-than-expected inflation data in the US.
US Personal Consumption Expenditure (PCE) Price Index in August was 3.4% YoY, below estimates of 3.7%, and unchanged from July's print.
RBA Governor Michele Bullock's dovish comments weighed on the AUD/USD pair, with her statement that 'no further rate hikes may be needed if inflation declines' contributing to losses of 0.57% against the US Dollar.
Despite a rise in US GDP in Q2 from 1.5% QoQ to 2.2% QoQ, exceeding estimates and indicating resilience, hawkish bets on a Fed rate hike in October were trimmed, with money markets now seeing a 61% chance of a hold.
ANZ analysts maintained their forecast for another RBA rate hike by the November meeting, citing upside surprise potential from upcoming inflation data and the need to tighten monetary policy further.