Weekly Roundup: Australian dollar pressured by USD strength
Amy Richards July 31st 2023 - < 1 minute read
The Australian dollar opened last week’s session on strong footing as AUD exchange rates were supported by hopes for more Chinese economic stimulus.
The ‘Aussie’ then faced a setback with the publication of Australia’s latest consumer price index. Inflation was shown to have decelerated at a faster-than-expected pace in the second quarter, which dampened Reserve Bank of Australia (RBA) rate hike bets.
AUD exchange rates spiked as we entered the second half of the week as a dovish Federal Reserve rate hike and weakening of the US dollar bolstered market risk appetite.
However, the Australian Dollar subsequently collapsed on Thursday. A startling rebound in the US dollar quickly soured market sentiment and saw investors shun the ‘Aussie’.
Looking ahead, the RBA’s latest interest rate decision will undoubtedly be the focus for investors this week. Following last week’s underwhelming inflation figures, markets suggest it’s a 50-50 chance of a hike, so we could see some volatility in the Australian dollar in the first half of the week.
Written by
Amy Richards