• AUD/USD edges higher to around 0.6950 in Friday’s Asian session.
• RBA’s Hunter reaffirmed the board will take necessary actions to bring inflation down to its target.
• Fed’s Williams said not looking for a sustained energy price increase.

The AUD/USD pair attracts some buyers to near 0.6950 during the Asian trading hours on Friday. The Australian Dollar (AUD) strengthens against the US Dollar (USD) on hawkish rhetoric from the Reserve Bank of Australia (RBA).

RBA Assistant Governor Sarah Hunter said on Wednesday that the board will act as needed to return inflation to its target, warning some tightening may be required if the oil shock lifts inflation expectations, per Reuters.

The Australian central bank has implemented three interest rate increases of 25 basis points (bps) so far this year, lifting the Official Cash Rate (OCR) to 4.35%. Current ASX 30-day Interbank Cash Rate Futures indicated a minor 19% market expectation of a rate hike to 4.60% at the upcoming August meeting. 

According to Federal Reserve (Fed) Minutes from June 16 to 17 meeting, the first under new Fed Chairman Kevin Warsh, showed many participants said its key rate would be unchanged from or slightly below its current level of 3.6% by the end of this year. But “many” also said that it would likely be higher by year-end.

New York Fed President John Williams said on Thursday that despite the resumption of hostilities in the Middle East, he was not looking for a sustained rise in ‌energy prices over the remainder of the year.

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