Australian Dollar Under Pressure, Markets Doubt RBA Rate Hike
The Australian dollar remained below US$0.70 and remained near a three-month low on Wednesday (July 1). The main pressure came from the strengthening US dollar, which has once again dominated the foreign exchange market, while the outlook for domestic monetary policy remains mixed.
The minutes of the Reserve Bank of Australia (RBA)'s June policy meeting showed that policymakers still see risks of rising inflation. The central bank also remains ready to raise interest rates again if necessary, having already hiked three times this year.
Although the RBA's policy tone remains hawkish, the drop in oil prices following the meeting has dampened expectations of additional rate hikes. The market now only expects a 15% chance of a rate hike at the August meeting.
Investors also see a 60% chance that the current cash rate of 4.35% has reached the peak of the RBA's tightening cycle. Meanwhile, the first interest rate cut is not expected until late 2027. Meanwhile, the US dollar remains strong as solid US economic data reinforces expectations that the Federal Reserve may still raise interest rates this year. (asd)
Source: Newsmaker.id
