The AUD/USD pair reverses an intraday dip to sub-0.6700 levels and climbs to over a four-week high during the early part of the European session on Friday. Spot prices, however, struggle to capitalize on the move and currently trade around the 0.6710-0.6715 region, nearly unchanged for the day. The Australian Dollar (AUD) continues to draw support from the Reserve Bank of Australia’s (RBA) surprise 25 bps rate hike earlier this week and a more hawkish policy statement. In fact, RBA Governor Lowe on Wednesday defended the move to lift the benchmark ratesabove 4% for the first time in nearly 12 years and reiterated that interest rates may need to rise further in order to curb overheated inflation. This, in turn, acts as a tailwind for the AUD/USD pair, though a combination of factors is holding back bulls from placing aggressive bets and capping the upside, at least for the time being.
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