AUD/USD Torn Between US Rate Hikes and Another RBA Move

The Australian dollar's eight-week winning streak came to an end after Fed Chair Kevin Warsh delivered a hawkish speech at Jackson Hole, reviving US rate-hike bets. The AUD/USD pair was caught between competing policy risks as expectations of another RBA hike grew due to stronger Australian inflation and household spending.

Warsh emphasized the importance of meeting the Fed's 2% inflation objective, stating that policymakers need to be confident that underlying inflation is moving towards it 'clearly and at sufficient speed'. He warned that if this target is not met, 'the Fed has work to do.'