The Australian dollar snapped an eight-week winning streak after Fed Chair Kevin Warsh's hawkish Jackson Hole speech revived US rate-hike bets. Yet stronger Australian inflation and household spending have also raised expectations of another RBA hike, leaving AUD/USD caught between competing policy risks ahead of Australian GDP and US nonfarm payrolls.
Goldman now expects an RBA hike to 4.60% in November after a broad July inflation surprise, adding fresh rate support to the Australian Dollar. The Australian Dollar to US Dollar (AUD/USD) exchange rate ended Friday at 0.7163, still 1.7% higher in August despite losing 0.45% after Warsh's Jackson Hole speech.
AUDUSD keeps firm tone and holds near the highest in 3 ½ months on Friday, on track for the ninth straight weekly gain and for the second consecutive monthly close in green.
AUD/USD continues to build on an impressive multi-month recovery, with the rally extending nearly 5% from the June low. The advance remains constructive as buyers attempt to clear the median line of the 2025 uptrend, but a major resistance confluence just overhead raises the risk for near-term price inflection.
Gold has finally paused after an aggressive rally from the $4,000 area, with price now testing a significant resistance zone around $4,700. That area combines a major round number, a high-volume node from the prior decline and the May high, leaving gold vulnerable to a near-term pullback despite the broader trend remaining constructive.
AUDUSD Aussie remains propelled The Australian dollar(AUDUSD) remained in control as prices hit another higher high. The pair has recovered from the recent bearish downturn.
AUD/USD Price Forecast: Hawkish RBA bets support rally towards 0.7275
Australian household spending strengthened again in July, adding another piece of evidence to the case for a September RBA hike. With inflation, construction activity and consumer spending all pointing to firmer domestic conditions, the Australian dollar has found renewed support while the ASX 200 remains under pressure.
The Aussie dollar is flying against the crosses, powered by a rapid increase in hawkish RBA pricing following the release of uncomfortably hot inflation data for July.
The euro is riding genuine hawkish momentum right now. It's holding above $1.165 against the dollar, its strongest level since mid-May, with markets fully pricing in an ECB hike in September following June's initial tightening move.
AUD/USD Price Forecast: Hot Australian CPI data boosts hawkish RBA bets
Australian inflation came in hot enough to revive RBA hike expectations, with trimmed mean CPI rising 0.5% m/m and annual underlying inflation holding at 3.6%. Australian bond yields jumped after the release, while renewed policy tightening risk added further pressure to elevated AUD/USD short positions.