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AUD/USD trades near 0.7010 as RBA hike odds rise
The pair moved higher as traders priced roughly a 23% chance of an August RBA rate hike and looked ahead to Australia’s June jobs data, where expectations call for 15,000 more jobs.
The Australian dollar strengthened against the US dollar, pushing AUD/USD to around 0.7010 in early Asian trading on Wednesday, as the market raised its odds that the Reserve Bank of Australia could tighten policy further. FXStreet attributed the support for the Aussie to a hawkish repricing of RBA rate expectations after three consecutive 25 basis point hikes earlier this year, when the RBA later held its Official Cash Rate at 4.35% at the June meeting. Speculation has intensified in part due to energy-driven inflation fears linked to the US-Iran conflict. Traders also focused on Middle East escalation, with the US launching an 11th consecutive night of strikes against Iran and reporting explosions in northwestern Iran. While higher tensions can sometimes lift safe-haven demand, the broader positioning in this setup centered on RBA expectations, with pricing described as nearly 23% for a hike in August and more than a 50% probability by December. Attention then turned to Australia’s June employment release later Thursday, where forecasts call for jobs to rise by 15,000 and the unemployment rate to remain at 4.4%. FXStreet said stronger-than-expected employment data could further lift the Australian dollar versus the US dollar.