Near 0.7000: Australian Dollar slips despite RBA’s hawkish stance

• 0.7015 is in view as AUD/USD eases in early Asian trading on Thursday.
• A November rate rise is increasingly possible after RBA’s Hauser said the inflation outlook was materially worse than the bank had projected.
• The Fed’s next policy steps remain a key market driver.

AUD/USD slips towards 0.7015. The pair is losing traction in Thursday’s early Asian session as risk aversion and safe-haven demand lend some support to the US Dollar (USD) against the Australian Dollar (AUD). Attention turns to weekly US Initial Jobless Claims, scheduled for release later on Thursday.

According to Fars News, an Iranian official threatened to target US political figures should American strikes resume, substantially escalating Tehran’s warnings. Separately, the Saudi-led coalition reported early Wednesday that it had intercepted and destroyed five drones heading towards Saudi Arabia. Continued Middle East tensions could strengthen demand for safe-haven currencies, including the Greenback, weighing on the pair.

For the Aussie, Andrew Hauser’s comments have prompted traders to increase bets on a Reserve Bank of Australia (RBA) rate rise. Speaking on Wednesday, RBA monetary policy board member Hauser cautioned that the inflation outlook for the coming months was “materially worse”. His warning described the outlook for inflation in the months ahead as “materially worse”.

According to the Guardian, the probability of a rate rise at the November policy meeting climbed to 45%, from 30% before Hauser spoke. Such a move would mark the year’s fifth increase, taking the Official Cash Rate target (OCR) from its current 4.6% to 4.85%, the highest since the global financial crisis.

RBA hike bets increase on Hausner’s “materially worse” inflation warning

Following hawkish comments by RBA Deputy Governor Andrew Hausner, analysts at MUFG say Australia’s rates market has adjusted “to price in a higher probability of another RBA rate hike before the end of this year”. Relative to the RBA’s August forecasts, Hausner described the inflation outlook as “materially worse”. He pointed out that “we’re seeing higher AI prices, tech prices feeding through into CPI…and we’re having a boom in data centre construction here in Australia as well, so that’s upside too, and then on domestic capacity pressure”.

Another concern raised by Hausner, MUFG stresses, was that “inflation has been high for a very long time now, and we are beginning to see some signs that people in the community are not sure if we’re going to bring inflation back to target, or certainly not for an extended period”. The bank says the hawkish remarks have consequently led market participants to price in “closer to a 50:50 probability of another RBA hike next month”.

5.6/10 Speechtracker score: Warsh highlights investment and AI, leaves Fed options open

At 5.6/10, the FXS Speechtracker score for Fed Chair Warsh’s remarks fell below the historical average of 6.1/10. His message was moderately positive but cautious, indicating slightly less conviction than the established baseline. Warsh’s admission that he was “over-scarred from the Global Financial Crisis” points to an enduring risk-averse bias. At the same time, he highlighted a structural acceleration in growth and investment underpinned by “good policies”, while declining to commit in advance to October or December decisions. His emphasis on AI as both a near-term demand shock and a future aid to confidence in data suggests the Fed is embracing technological tailwinds. It nevertheless remains watchful over uncertain labour-market effects and possible financial stability risks.

With a move of 0.00 points, the FXS Fed Sentiment Index held at an elevated 127.51. That reading remains consistent with a firmly hawkish stance, notwithstanding the marginally softer FXS Speechtracker score. Taken together, the high index reading and non-committal forward guidance suggest markets still price in a restrictive Fed reaction function. Warsh’s emphasis on output, employment, inflation and tail risks reinforces a preference for keeping policy tight rather than signalling an imminent shift.

100-day SMA caps AUD/USD: Technical Analysis

On the daily chart, nearby support comes from the Bollinger midline, while AUD/USD trades just below the 100-day simple moving average (SMA) and the upper Bollinger band. Upside remains tentatively constrained. A Relative Strength Index (14) reading around 51 signals modestly positive momentum without strong conviction. This is consistent with a neutral short-term bias as the pair fluctuates around 0.70.

The 100-day SMA at 0.7035 provides immediate resistance, closely followed by the upper Bollinger band, also at 0.7035. Buyers would need to overcome this narrow supply zone to build on gains. Below the market, the middle Bollinger band near 0.6975 offers initial support. If selling returns, the lower band around 0.6915 provides a firmer floor.

(The technical analysis of this story was written with the help of an AI tool. Know more.)