Australian Dollar Pauses Rally as Rate Hike Chances Rise

The Australian dollar paused its rally on Wednesday after hitting a four-month high of $0.7231, but hawkish comments from Reserve Bank of Australia Deputy Governor Andrew Hauser kept the case for an imminent rate hike intact.

Hawkish messaging from Hauser added to the case for a rate hike at the next policy meeting on September 28-29, after raising rates by 75 basis points this year and holding them steady at 4.35% for two consecutive meetings.

The economy continues to outperform expectations, with inflation pressures remaining persistent. Goldman Sachs has shifted its rate hike call forward to this month from November, prompted by Hauser's comments and higher oil prices.