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Australian dollar rises for third day, AUD/USD near 0.718
Core PCE inflation in the US came in at 3.3% year over year in July, lifting expectations for a possible Fed hike by December 2026.
The Australian dollar extended its rally for a third straight day, pushing AUD/USD to around 0.7176 after moving up from about 0.7159, according to FXStreet.
In the US, Core PCE rose 3.3% year over year in July, matching expectations, while the headline figure held at 3.7% year over year, slightly above forecasts for 3.6%. After the data, investors priced in an above 70% chance of a Fed rate increase at the December 2026 meeting, while the US Dollar Index edged up 0.23% to 99.13.
US Treasury yields also moved higher, with the 10-year benchmark finishing Wednesday at 4.649%, up over two and a half basis points. FXStreet also pointed to US GDP growth of 1.5% year over year in the second quarter and an increase in durable goods orders in July supported by transportation.
On the Australian side, trimmed mean inflation was reported at 0.5% month over month in July, raising the odds of another Reserve Bank of Australia hike. FXStreet said swaps markets priced in a 43% chance of an RBA hike at the September 29 meeting, and it noted the pair remains above key moving averages, suggesting a bullish near term bias.
Latest closeDollar index 102.12 ▼0.1%