Forex News: Australian Dollar Rises On RBA Rate Hike Bets

Australian Dollar Rises On RBA Rate Hike Bets

(RTTNews) - The Australian dollar strengthened against other major currencies in the Asian session on Wednesday, amid rising speculations that the Reserve Bank of Australia or the RBA will raise interest rates next week.

In reality, despite worries about a possible war-related spike in inflation, RBA Deputy Governor Andrew Hauser stated on Tuesday that there will be a serious discussion about whether or not to hike interest rates when the central bank meets next week.

Asian stock markets traded higher, as traders remain cautious amid developments in the Middle-East conflict even as U.S. President Donald Trump reportedly said the war against Iran could end "very soon." Trump also said Iran would be hit "twenty times harder" if they do anything that stops the flow of oil within the Strait of Hormuz.

Echoing Trump's confidence, Defense Secretary Pete Hegseth asserted in a press conference that Iran is "badly losing" but said the U.S. will still be launching its "most intense day of strikes" in Iran.

The latest developments in the Middle East are likely to remain in focus, although a report on US consumer price inflation may still attract attention.

The Trump administration sent mixed signals on the Iran war, with President Donald Trump saying the conflict could end soon amid mounting market pressure, while senior officials indicated that military operations were intensifying and diplomatic talks remained unlikely. Iran's Revolutionary Guards dismissed Trump's claims, warning that the blockade would continue until US and Israeli attacks cease.

Meanwhile, crude oil prices tumbled after reports that the International Energy Agency proposed the largest release of oil reserves in its history, surpassing the 182 million barrels the group released in 2022.

In the Asian trading today, the Australian dollar rose to a 36-year high of 113.54 against the yen and more than a 1-1/2-year high of 1.6208 against the euro, from yesterday's closing quotes of 112.53 and 1.6308, respectively. If the aussie extends its uptrend, it is likely to find resistance around 115.00 against the yen and 1.61 against the euro.

Against the U.S. and the New Zealand dollars, the aussie advanced to nearly a 4-year high of 0.7175 and nearly a 13-year high of 1.2079 from Tuesday's closing quotes of 0.7120 and 1.1867, respectively. The aussie may test resistance around 0.72 against the greenback and 1.22 against the kiwi.

The aussie edged up to 0.9728 against the Canadian dollar, from yesterday's closing value of 0.9728. On the upside, 0.98 is seen as the next resistance level for the aussie.

Looking ahead, U.S. MBA mortgage approvals data, U.S. CPI data for February and U.S. EIA crude oil data are slated for release in the New York session.

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