Australian Dollar Steadies Amid Inflation Fears

The Australian dollar held steady around $0.665 as a hot inflation reading raised fears of a potential rate hike by the Reserve Bank of Australia (RBA) in August. Australia's Monthly CPI Indicator rose by 4% in May, up from 3.6% in April, surpassing market expectations of 3.8% and marking the highest figure since November last year.

Markets now see a 42% chance of an RBA rate hike in August, with no rate cuts expected this year. Investors are now awaiting Australia's second-quarter CPI figures at the end of July for further guidance.

Meanwhile, the Aussie lost ground against the US dollar due to hawkish comments from a Federal Reserve official. Fed Governor Michelle Bowman indicated that inflation would remain elevated for some time, making it premature to start cutting rates.