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Aussie dollar slips below 0.70 as RBA tone outweighs US data
AUD/USD was last at 0.6947 after US August PCE undershot estimates, while RBA Governor Michele Bullock said further rate hikes may not be needed if inflation declines.
The Aussie dollar fell 0.57% against the US dollar on Wednesday, pushing AUD/USD below 0.70 as interest rate expectations shifted after comments from Reserve Bank of Australia Governor Michele Bullock, according to FXStreet.
FXStreet reported the pair traded around 0.6947 after peaking near 0.6995, with the move coming despite US inflation data that trimmed expectations for an additional Federal Reserve rate hike in October.
US Personal Consumption Expenditure (PCE) inflation for August came in at 3.4% year over year, below an expected 3.7%, while core PCE was unchanged at 3.0% year over year. US GDP in the second quarter rose to 2.2% quarter over quarter from 1.5% earlier, above expectations, but money markets still adjusted toward a hold, FXStreet said.
Even so, FXStreet noted that Bullock’s dovish tilt, including that “no further rate hikes may be needed if inflation declines,” weighed on the Australian dollar, and markets shifted from a more than 60% chance of a 25 basis point hike to a 61% chance of holding, as shown by Prime Terminal data.