AUD/USD sharply falls despite RBA’s rate hike

The AUD/USD pair falls from weekly highs at around 0.6830s due to increased odds of an aggressive Fed hike.

On the US front, the ISM Non-Manufacturing activity for August surprisingly exceeded estimations, easing US recession worries whereas Australia’s GDP for the Q2, quarterly and yearly, is eyed on Wednesday’s Asian session.

The AUD/USD dives below its opening price, snapping two days of gains after the Reserve Bank of Australia hiked rates as expected. However, upbeat US economic data fueled estimations that, indeed, the US Federal Reserve would hike by 75 bps the Federal Funds Rate (FFR) in the September 21-22 meeting.

The AUD/USD reached Tuesday’s high after the RBA’s decision around 0.6832. but extended its losses, despite Philippe Lowe and Co. reiterating that the central bank is not done with tightening monetary conditions. So the AUD/USD extended its losses earlier in the North American session and is trading at 0.6732 at the time of writing.