AUD/USD Propped by Fed Hopes and Hawkish RBA
AUD/USD Analysis
Markets expect at least four rate cuts by the US Fed over the next three meetings, in an aggressive pricing that is fueled by decelerating inflation and renewed recession fears following the last soft employment report. The monetary policy differential supportive too, since the Fed is moving closer to cutting rates, whereas its Australian counterpart has more ground to cover. RBA Governor Bullock pushed back against rate cuts calls after the last meeting, stressing that such action "doesn't align with the Board's current thinking" and keeping another hike on the table [1]. The accounts of that decision reaffirmed the hawkish bias, showing that policymakers could potentially hold rates at current twelve-year highs "for an extended period". [2]
AUD/USD rises as result, running its third straight profitable week. The Aussie has the opportunity to take another crack at the 0.6800 handle, but catalyst will be needed for further gains. On the other hand, the advance looks stretched technically and there is scope for a pullback to the EMA200 (black line). Daily closes below it would shift bias to the downside and expose AUD/USD to 0.6464.
The Australian central bank may have dismissed calls for less restrictive stance, but markets hope for cuts within the year. Furthermore, US recession fears and pricing around the Fed appear stretched, crating room for disappointment. All eyes are now at the Jackson Hole Symposium and Chair Powell's speech on Friday, to see if he will offer rate path hints.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
References
| Retrieved 20 Aug 2024 https://rba.livecrowdevents.tv/MediaConferenceMonetaryPolicyDecision6August/stream | |
| Retrieved 12 Apr 2026 https://www.rba.gov.au/monetary-policy/rba-board-minutes/2024/2024-08-06.html |
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