FX.co ★ Australian Dollar Gains on Hawkish RBA Comments

The Australian dollar rose above $0.65, approaching its highest level in a week, following remarks from Reserve Bank of Australia Deputy Governor Andrew Hauser about the unique challenges facing monetary policy. Hauser highlighted the necessity of maintaining stringent policy measures to control inflation. He noted that demand slightly exceeded potential when GDP growth spiked last year, resulting in the most constrained recovery since the early 1980s, which limits expansion opportunities without triggering inflationary pressures. Earlier this month, the RBA maintained its policy rate at 3.6% amidst ongoing underlying price pressures. Market forecasts largely anticipate one more rate reduction, potentially by May of next year, although some analysts suggest that the easing cycle may have concluded. Additional support for the Australian dollar came from improved risk sentiment linked to optimism over an end to the prolonged US government shutdown and a reduction in US-China trade tensions.