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The Australian dollar appreciated as the Governor of the Reserve Bank of Australia, Michele Bullock, said that if the CPI does not return to the target range, interest rates will be raised, and the Australian dollar appreciated accordingly.
Australia’s GDP grew by 0.1% quarter-on-quarter in the first quarter, lower than the expected 0.2%.
The Caixin China Services PMI was 54.0 in May, marking the 17th consecutive month of expansion in services activity.
The US dollar may rebound due to rising US Treasury yields.
The Australian dollar (AUD) rose as the Governor of the Reserve Bank of Australia (RBA), Michele Bullock, said on Wednesday that the central bank would be ready to raise interest rates if the Consumer Price Index (CPI) does not return to the target range of 1%-3%, according to NCA NewsWire.
The upside of the Australian dollar may be limited due to the lower-than-expected gross domestic product (GDP) data. In the first quarter, GDP grew by 0.1% quarter-on-quarter, lower than the expected 0.2%. The economy grew by 1.1% year-on-year, slightly lower than the expected 1.2%. AUD/USD was under pressure as the Judo Bank Purchasing Managers’ Index (PMI) was 52.5, lower than the expected 53.1 in May.
The US dollar may rebound due to the upward revision of US Treasury yields. The dollar weakened amid growing speculation that the Federal Reserve will cut interest rates this year. Investors awaited key U.S. data due later on Wednesday, including the U.S. ADP employment change and ISM services PMI reports.
