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Aussie dollar slips as odds of an RBA hike firm up

AUD/USD was at 0.7016 after the dollar fell 0.10%, with markets pricing a 100% chance of an RBA rate increase on September 29.

Reported · Written up by our desk · Major Pairs

Australia's currency weakened against the US dollar, with AUD/USD down 0.10% to 0.7016, as sentiment deteriorated amid fading hopes for US-Iran peace and US bond yields moved higher while US equities fell, according to FXStreet.

FXStreet also cited mixed US data, noting the Dallas Fed manufacturing index fell 1.8 points to 9.8 in September, though it stayed above its long-term average of 0.3.

On the US policy front, FXStreet reported Fed Governor Lisa Cook said she expects inflationary pressures to build in the coming months, supported by AI and the US-Iran conflict, and that she believes the jobs market is well-positioned to handle a cycle of rate increases aimed at tackling inflation.

In Australia, FXStreet said the RBA is expected to raise rates 25 basis points from 4.6% to 4.85%, the highest level since 2008, and that money markets priced in a 100% chance of a hike on September 29.

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