Australian Dollar Climbs to Three-Year High After Hawkish RBA Signals
The Australian dollar surged to a three-year high on Wednesday after hawkish remarks from Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser strengthened expectations of another interest rate increase later this year.
The AUD/USD exchange rate advanced 0.8%, climbing above the $0.71 level for the first time since early 2023. The move followed Hauser’s comments that inflation pressures in Australia remain persistent. He emphasized that the central bank stands ready to tighten policy further if necessary to safeguard price stability.
Financial markets viewed the statement as confirmation that the RBA maintains a tightening bias. As a result, traders increased their bets on a potential near-term rate hike, driving further momentum in the Australian dollar.
At its previous policy meeting, the RBA raised interest rates by 25 basis points, bringing the benchmark rate to 3.85%. The latest comments suggest policymakers remain cautious about inflation risks and are prepared to act again if required.
The rally in the Australian currency was also supported by a weaker U.S. dollar ahead of important U.S. labor market data scheduled for release later in the session. The upcoming jobs report could play a key role in shaping the Federal Reserve’s future monetary policy decisions, influencing global currency markets.
