Aussie Steadies as US Rate Outlook Cools

The Australian dollar has steadied after two weeks of losses as market expectations for higher interest rates in the US have cooled its recent rally.

Despite being near multi-year highs against the New Zealand and European currencies, the Aussie was little changed at $0.7128 on Monday, down 0.6% from last week's close.

The Reserve Bank of Australia is widely expected to raise interest rates for a fourth time this year next week, with markets pricing in a hike to 4.6%. This would be in line with recent calls from the Commonwealth Bank of Australia and ANZ, which have joined the other two Big Four banks in predicting a rate increase.

ANZ's Adam Boyton stated that it seems unlikely for the RBA to pull back expectations of a near-term rate hike following its public communications last week. With Governor Michele Bullock set to give remarks on Tuesday and Assistant Governor Sarah Hunter to do a podcast interview, markets will be closely watching for any signals from the central bank.