The Australian dollar saw a notable increase against other major currencies in the late Asian trading session on Thursday, following statements by Reserve Bank of Australia (RBA) Governor Michele Bullock. Signaling a firm stance on inflation, Governor Bullock expressed the Board’s readiness to elevate interest rates as necessary to mitigate the effects of persistently high inflation.
In her address, the Governor marked inflation risks as a significant concern, underlining an unexpected gap between aggregate demand and aggregate supply within the economy. This gap, she noted, has been a driving force behind the ongoing inflationary pressures. Although demand growth is anticipated to rise over the next year, Bullock highlighted the prevailing uncertainties surrounding economic forecasts. Consequently, the timeline for inflation to re-align with the target has been extended.
Bullock firmly stated, “the Board remains vigilant with respect to upside risks on inflation and will not hesitate to raise rates if it needs to,” emphasizing the central bank’s commitment to tackling inflation head-on.
In response to these developments, the Australian dollar demonstrated strength in the European trading session. It reached a two-day peak against the New Zealand dollar, moving from an early three-day low of 1.0868 to 1.0940. Analysts suggest that if the positive momentum continues, the AUD/NZD could potentially test the resistance near the 1.12 level.
Similarly, gains were observed against the Canadian dollar, with the aussie advancing from an early three-day low of 0.8951 to 0.9014. The anticipated resistance level for the AUD/CAD pair lies around the 0.91 mark.
The Australian dollar also saw upward movements against the U.S. dollar, the yen, and the euro, climbing to 0.6565, 96.31, and 1.6653 from respective early lows. Should this uptrend persist, the aussie is expected to encounter resistance at 0.67 against the greenback, 99.00 against the yen, and 1.64 against the euro.
Market participants are now looking forward to the upcoming U.S. weekly jobless data, which will be released in the New York session, for further trading cues and potential impacts on currency movements.
