RBA's Harper warns of rising inflation expectations, boosting AUD/USD as rate-cut hopes fade.
RBA's Harper flagged rising inflation expectations, which makes the central bank more likely to keep rates elevated. This hawkish stance reduces the probability of near-term cuts, lifting AUD/USD as yield differentials favor the Aussie.
Harper's concern over inflation expectations suggests the RBA will not cut rates soon, boosting the Australian dollar's yield appeal and driving AUD/USD higher.
If the hawkish narrative persists, AUD/USD could test resistance at 0.6700. However, sustained move beyond depends on broader USD strength.
RBA Assistant Governor Harper expressed concern over a recent uptick in inflation expectations, suggesting the central bank may keep policy restrictive for longer. The remarks lifted the Australian dollar as markets pared back rate-cut bets.
Harper expressed concern over an uptick in inflation expectations, warning that it could undermine the RBA's efforts to return inflation to target.
The hawkish tone reduced market bets on near-term RBA rate cuts, making the Australian dollar more attractive relative to other currencies, thus pushing AUD/USD higher.