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AUD/USD rebounds near 0.7080 as RBA stays hawkish
The Aussie gained 0.3% after earlier losses, helped by hawkish RBA comments even as softer US inflation cut expectations for a September Fed hike.
The Australian dollar rebounded on Friday against the US dollar, with AUD/USD trading around 0.7080 and up 0.3% on the day after slipping to 0.7044 on Thursday, according to FXStreet.
Support for the pair came from hawkish messaging from the Reserve Bank of Australia, with RBA Assistant Governor Chris Kent saying recent rate increases are working as intended while leaving the door open to further tightening if fresh inflation risks emerge.
At the same time, the US dollar struggled to regain traction after softer US inflation data reduced expectations of a Federal Reserve rate increase in September. FXStreet cited the CME FedWatch Tool showing a 34.8% chance of a September hike, down from about 60% two weeks earlier.
Focus for further direction shifted to US Retail Sales and consumer sentiment, with markets expecting Retail Sales to rise 0.1% in July and the preliminary University of Michigan Consumer Sentiment Index for August to ease to 54.5 from 55.2. FXStreet added that on the one hour chart, AUD/USD held above key moving averages and was pressing toward the 0.7090 area, though RSI signaled near term overbought conditions.