RBA Rate Hike Next Week? AUD/USD a Bet
AUD/USD weakened after three consecutive days of gains, and traded around 0.7030 in Friday's Asian session. The market responded to Australian PPI data, which rose 3.5% (YoY) in the fourth quarter of 2025—exactly the same as the previous quarter. Because there were no surprises from this data, the AUD's momentum felt "lack of fuel."
Nevertheless, the opportunity for AUD to strengthen again remains open due to higher-than-expected Australian inflation earlier this week. This data has increased market confidence that the RBA could raise interest rates as early as next week. Currently, market expectations point to a above 70% chance of a 25 bps hike from 3.6%, with the rate projected to reach 3.85% in May and approach 4.10% around September.
Globally, the US is adding to the volatility. The US Treasury Department has highlighted the importance of China allowing the RMB to strengthen in line with fundamentals due to China's large external surplus, while Bloomberg reports that Trump will announce his successor to Jerome Powell as Fed Chair on Friday morning. Trump has also signaled his desire to cut interest rates if there are signs of slowing growth—which could shift the dollar's direction and impact the AUD/USD. (az)
Source: Newsmaker.id
