Australian Dollar gains momentum against other major currencies prior to the release of US NFP figures

AUD/USD Rises Amid Anticipation of RBA Rate Hike

The AUD/USD currency pair advanced by 0.4% to approach 0.7040 during Friday’s Asian session. The Australian Dollar (AUD) is showing notable strength, buoyed by widespread expectations that the Reserve Bank of Australia (RBA) may soon implement another interest rate increase.

At its February meeting, the RBA raised the Official Cash Rate (OCR) by 25 basis points to 3.85%. Governor Michele Bullock emphasized the need for tighter monetary policy, citing persistent upward risks to inflation.

Additionally, escalating oil prices—driven by ongoing conflict in the Middle East involving the United States, Israel, and Iran—have reinforced speculation that the RBA could opt for a rate hike in the near future.

Reuters reports suggest there is a 33% probability that the RBA will lift interest rates to 4.1% at its March 17 policy meeting. Markets have already factored in a rate increase for May, with the possibility of another hike before year’s end.

Meanwhile, the US Dollar (USD) remains steady, with the US Dollar Index (DXY) hovering near 99.00 as traders await the release of February’s US Nonfarm Payrolls (NFP) data at 13:30 GMT. This employment report is expected to provide new insights into the Federal Reserve’s (Fed) future policy direction.

Overall, the US Dollar has maintained an edge over other major currencies, as ongoing geopolitical tensions in the Middle East continue to drive risk-off sentiment in the markets.