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Source: Newsmaker.id
The AUD/USD pair weakened during Tuesday's trading, hovering around 0.7120 and retreating from the four-month high near 0.7200 reached earlier this month. Pressure stemmed from a resurgent US dollar ahead of the Federal Reserve's policy decision.
The Dollar Index held just below the 100.00 level and strengthened as market participants adjusted their positions leading up to Wednesday's FOMC meeting. The dollar's appreciation caused risk currencies, including the Australian dollar, to lose momentum.
The Fed has maintained its interest rate range at 3.50%–3.75% since December 2025 and has left policy unchanged over the last five meetings. However, markets now anticipate a 25-basis-point hike, bringing the range to 3.75%–4.00%.
These expectations gained traction after Fed Chair Kevin Warsh emphasized that inflation has not yet shown significant improvement. Solid US labor market data for August also reinforced the view that the central bank still has room to tighten policy.
Newsmaker Analysis: The AUD/USD pair remains under pressure as long as the US dollar stays strong and markets maintain expectations for a Fed rate hike. If Warsh signals a hawkish stance following the FOMC decision, the pair could remain under pressure. Conversely, a more dovish tone than anticipated could pave the way for a rebound in the Aussie. (arl)
Source: Newsmaker.id