Australian Dollar Pauses as Hawkish Sentiment and Oil Prices Support Rate Hike
The Australian dollar took a breather from its recent rally on Wednesday due to growing concerns about global risk sentiment following the widening war in the Gulf. Despite this, hawkish central bank messaging and higher oil prices continue to support the case for an imminent rate hike.
The Aussie was steady at $0.7220, having hit a four-month peak of $0.7231 overnight before facing some resistance. With its value up more than 5% from its June low, it is closing in on the May peak of $0.7277 and a mid-2022 high of $0.7285.
Reserve Bank of Australia Deputy Governor Andrew Hauser expressed his expectation that the board will discuss the case for a rate hike at their next policy meeting on September 28-29, citing increased concerns about inflation following his recent trip to the US. This hawkish commentary, combined with higher oil prices, prompted Goldman Sachs to shift its rate hike call forward to this month from November.