Australian Dollar Steady
The Australian dollar held steady around $0.666 on Tuesday, following gains from the previous session, supported by diminishing expectations of further interest rate cuts by the Reserve Bank of Australia. Markets are now pricing in an 86% probability that the central bank will keep rates unchanged at its September meeting.
This sentiment has been bolstered by a strong July trade surplus, resilient Q2 GDP figures, and hotter July inflation. Additionally, consumer inflation expectations rose in September, signaling sustained domestic demand and raising concerns about a possible resurgence in inflationary pressures.
Meanwhile, the Aussie dollar also found support from encouraging geopolitical developments. On Monday, the US and China reached a commercial agreement that would bring TikTok under US ownership, with final approval anticipated during a Friday call between President Donald Trump and President Xi Jinping.
Source: Trading Economics