AUD/USD aims to establish above 0.6820 as RBA releases July policy minutes

• AUD/USD is expected to surpass 0.6820 as RBA minutes dictate hawkish guidance.
• The RBA elevated its interest rates consecutively by 50 bps in July.
• A slippage in long-term inflation expectations has turned the DXY bearish broadly.

The AUD/USD pair is displaying topsy-turvy as the Reserve Bank of Australia (RBA) has released July monetary policy minutes. The pair is expected to advance towards 0.6820 as the minutes display hawkish guidance by RBA policymakers.

It is worth noting that the RBA elevated its Official Cash Rate (OCR) consecutively by 50 basis points (bps). Currently, the OCR stands at 1.35%.  The inflation rate was recorded at 5.1% for the first quarter of CY2022. Price pressures have soared further extensively after the prior release of the inflation rate. Higher energy bills and food products are responsible for escalating price pressures. The households in the antipodean region are facing the headwinds of the inflation mess, which are impacting strongly on their paychecks.

Last week’s upbeat employment data by the Australian Bureau of Statistics favored aussie against the greenback. The jobless rate tumbled significantly to 3.5% from the prior release of 3.8%. Also, the economy added more than 88k jobs to the labor market.

On the dollar front, the US dollar index (DXY) is likely to remain lackluster amid a light calendar week. The DXY is facing minor barricades around 107.60 as odds of a rate hike by 100 basis points (bps) have trimmed. The Federal Reserve (Fed) was expected to follow the footprints of the bank of Canada (BOC) by accelerating its interest rates by 100 bps. However, a decent slippage in log-run inflation expectations has trimmed the forecast for a rate hike. The inflation indicator has landed at 2.8% from the prior print of 3.1%.