AUD Weakens to Near 0.7200 Ahead of Key US Inflation Data

The Australian Dollar (AUD) has weakened to near 0.7200 against the US Dollar (USD) as traders await key US inflation data this week, which could provide clues to the Federal Reserve's (Fed) monetary policy.

According to the CME FedWatch Tool, traders are pricing in about 60% odds of an interest rate hike at the central bank's policy meeting next week.

The upcoming Producer Price Index (PPI) data due on Thursday and Consumer Price Index (CPI) data on Friday will offer further hints about the monetary policy outlook of the Fed ahead of its meeting next week.

RBA Assistant Governor Sarah Hunter said that the central bank may need to raise interest rates again if inflation proves more persistent than expected, keeping alive the prospect of another hike at its September meeting.