Aussie Holds Steady Amid US Dollar Strength and RBA Rate Hike Expectations

The Australian dollar has maintained its position around $0.71, but is struggling to sustain its recent rebound from a four-week low.

This is due to the firmer US dollar offsetting bets on an RBA rate hike next week, which is now largely priced in by markets.

RBA Governor Michele Bullock highlighted upside inflation risks, pointing to persistently high energy prices and continued excess demand in the domestic economy.

Assistant Governor Sarah Hunter also emphasized that interest rates might need to rise for a fourth time this year to curb inflation, with markets pricing a 95% chance of a 25bp hike to 4.60% on September 29.