AUD/USD Rises to 0.6990, Market Focus Turns to RBA
The Australian dollar strengthened slightly against the US dollar in Asian trading on Tuesday (July 28th). AUD/USD hovered around the 0.6990 level after paring its previous daily losses.
Market participants now await a statement from Reserve Bank of Australia Governor Michele Bullock, who is scheduled to speak later that day. Investors will be watching for any new signals regarding the direction of the RBA's interest rate policy amid persistent concerns about persistently declining inflation.
Sentiment toward the Australian dollar is also influenced by Australian inflation data for June and the second quarter, due to be released on Wednesday. If the data shows persistent price pressures, the market could reassess the likelihood of a tighter RBA policy.
However, AUD/USD's gains are potentially limited due to the relative stability of the US dollar. Investors remain cautious ahead of the Federal Reserve's policy decision on Wednesday, with the market pricing in a nearly 38% chance of a July rate hike and an 81.4% chance of a minimum 25 basis point hike in September.
In terms of market impact, the AUD/USD pair has the potential to gain support if the RBA Governor's speech and Australian inflation data reinforce expectations of a more hawkish policy stance. However, if the Fed gives a firm signal that it will raise interest rates, the US dollar could strengthen again, putting pressure on the Aussie. Developments in US-Iran diplomacy and falling oil prices also remain important factors as they could influence global inflation expectations. (asd)
Source: Newsmaker.id
