Ella 
In early trading in Asia on Wednesday, AUD/USD continued to rise and was around 0.6530. AUD/USD was slightly boosted by a sell-off in the U.S. dollar and the Reserve Bank of Australia maintaining a hawkish stance. Investors will get more fresh catalysts from Reserve Bank of Australia Governor Bullock’s speech on Friday.
Cleveland Fed President Loretta Mester said on Tuesday that the Fed may cut interest rates later this year, but cutting rates too soon would be a mistake. Meanwhile, Minneapolis Fed President Neel Kashkari said the central bank has not yet hit its target on annual inflation data, but that the three-month and six-month data are basically on target. Federal Reserve Chairman Jerome Powell played down the market’s optimistic prospect of a rate cut in March, and strong labor market data last week may persuade the central bank to delay the option of cutting interest rates until the second half of the year.
In the Australian dollar, the Reserve Bank of Australia decided to keep the cash rate unchanged at 4.35% at its February meeting on Tuesday. In a press conference, the RBA board said inflation had eased significantly but remained at a high level of 4.1 per cent. The board of directors said it would not rule out the possibility of further interest rate hikes and that the central bank would closely monitor global economic developments, domestic demand trends and the outlook for inflation and the labor market. The Reserve Bank of Australia’s hawkish guidance on inflation boosted the Australian dollar (AUD) and became a “tailwind” for the AUD/USD currency pair.
However, uncertainty over China’s economic outlook and ongoing geopolitical tensions in Ukraine and the Middle East could impact the Australian economy and potentially halt AUD/USD’s upside.
