Australia: Dollar Rises to 10-Week High.

The Australian dollar rose above $0.709, hitting a ten-week high as the Reserve Bank maintained a hawkish policy stance, while the US dollar weakened as Fed rate hike bets faded amid softer US economic data. Recent figures pointed to subdued US inflation, while consumer sentiment and retail sales also weakened. Markets now price roughly a one-in-three chance of a September rate hike, down from nearly 50% before the latest data. In Australia, the RBA held its cash rate at 4.35% for a second consecutive meeting last week, but Governor Michele Bullock said rates might need to rise again as the Strait of Hormuz remained closed and productivity growth stayed weak. RBA Assistant Governor Christopher Kent also said tighter monetary policy was working as designed, although its full effects on activity and inflation would take time. Markets now price around a 70% chance of one final move to 4.60% by early next year. Meanwhile, Australia’s July employment report will be in focus on Thursday.