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Australian dollar bounces, but AUD/USD stays capped ahead of Fed minutes
The pair is struggling to reclaim the 0.7080 area and remains pressured by Middle East uncertainty, higher oil prices, and steady Q2 wage growth that reduces immediate RBA hike expectations.
The Australian dollar rose from intra-week lows versus the US dollar on Friday, but AUD/USD remained under pressure and the daily trend was still negative, according to FXStreet. At the time of writing, the pair was unable to regain a prior support area above 0.7080 after earlier finding support near 0.7065. FXStreet said traders were positioning ahead of the release of minutes from the Federal Reserve’s July meeting, looking for additional guidance on the Fed’s near-term plans.
FXStreet also pointed to factors weighing on the Aussie, including rising uncertainty tied to the Middle East conflict and higher oil prices. In Australia, the Q2 Wage Price Index showed steady growth, easing pressure for the Reserve Bank of Australia to hike rates immediately.
In a note cited by FXStreet, Brown Brothers Harriman’s Elias Haddad said RBA cash rate futures imply 60% odds of a final 25 bps hike by year end to 4.60%, but that the risk is skewed toward a more extended pause because policy is already somewhat restrictive. Haddad added that AUD dips may be limited by Australia’s carry appeal and its strategic exposure to energy-linked commodities, AI, and defense.