The Australian Dollar (AUD) remained stable around 0.7061 against the US Dollar (USD) following the release of US inflation data, which initially weakened the Greenback before it recovered to end Thursday's session nearly flat. The AUD/USD pair registered a modest loss of 0.01% [1]. US Producer Price Index (PPI) data came in below estimates and improved compared to June, while Core PPI aligned with forecasts. Initial Jobless Claims for the week ending August 8 rose from 200,000 to 209,000, slightly above forecasts but close to the four-week average, indicating a solid labor market [1]. These data points led traders to adjust their expectations for future Federal Reserve interest rate moves, with the probability of a rate hike at the September meeting dropping to 30% and a 70% chance of rates being held steady. The next anticipated rate increase is now expected toward the end of 2026 [1].
Federal Reserve officials offered mixed views on the inflation outlook. Chicago Fed President Austan Goolsbee noted that the disinflation process is progressing, attributing much of the recent inflation to one-time shocks such as tariffs and oil prices. Goolsbee expressed optimism that if these shocks subside, inflation could move closer to the Fed's 2% target [2]. He also highlighted that the US economy remains stable and that recent inflation readings have improved slightly [2]. However, Cleveland Fed's Beth Hammack advocated for further rate hikes to restrain growth and inflation, contrasting with the more optimistic tone from Goolsbee and Thomas Barkin [1].
In Australia, Reserve Bank of Australia (RBA) Assistant Governor Christopher Kent warned that inflation risks remain to the upside, suggesting that if these risks materialize, further rate increases would be necessary [1]. Market participants are now awaiting a speech from RBA Governor Michelle Bullock, which could provide additional guidance on the central bank's policy outlook [1].
From a technical perspective, AUD/USD trades at 0.7062, maintaining a bullish near-term bias as it stays above key moving averages and trend-line support. The Relative Strength Index (14) is at 59, indicating positive momentum without overbought conditions. Resistance is seen at 0.7277 and 0.7297, with further upside potential if these levels are breached. Immediate support lies at 0.6955 and 0.6990, with a deeper decline targeting 0.6403 [1].
Currency performance tables show that the Australian Dollar was the strongest against the Japanese Yen this week, while the US Dollar was the strongest against the New Zealand Dollar today. The AUD/USD pair saw a -0.02% change today [1][2].
CONCLUSION
The Australian Dollar is holding steady amid mixed signals from US and Australian central bank officials. While US inflation data and dovish comments from some Fed members have tempered expectations for near-term rate hikes, the RBA maintains a hawkish stance due to persistent inflation risks. Market participants are closely watching upcoming speeches from central bank leaders for further policy direction.