FX.co ★ Australian Dollar Gains Ground

On Wednesday, the Australian dollar rose to approximately $0.648, continuing its upward movement from the prior session. This increase was driven by a surge in speculation surrounding a probable rate cut by the US Federal Reserve in September, which boosted risk sentiment. Market analysts are now forecasting a 90% likelihood of a rate easing, prompted by indicators of a faltering US economy. In trade developments, President Trump announced the possibility of implementing steep tariffs on imports of pharmaceuticals and semiconductors. However, he hinted at an extension of the trade truce with China before the impending August deadline, remarking that an agreement is "very close." Concurrently, with minimal economic data anticipated this week, the Australian dollar may face headwinds as markets have already factored in a quarter-point rate reduction by the Reserve Bank of Australia to 3.60% on August 12. Nevertheless, the central bank's cautious stance towards easing means investors primarily anticipate a pause in September, with any further rate cuts dependent on persistent disinflation. Investors' focus will shift to the third-quarter Consumer Price Index due on October 29 and the upcoming monthly employment data for indications of a sustained increase in unemployment.