• The Australian Dollar loses ground as RBA Deputy Governor Hauser advises against formulating policy based on a single inflation report.
• Australia’s high inflation has fueled speculation that the RBA might raise interest rates again in August.
• The US Dollar appreciates due to higher yields ahead of Friday’s release of Core PCE inflation.

The Australian Dollar (AUD) depreciates against the US Dollar (USD) on Friday, which could be attributed to the dovish comments from the Reserve Bank of Australia’s (RBA) Deputy Governor Andrew Hauser. Hauser said it would be a “bad mistake” to formulate policy in response to a single inflation report. He emphasized that there is still a suite of economic data to come that will require detailed analysis, per Bloomberg.

The AUD gained ground after releasing May's higher-than-expected Monthly Consumer Price Index (CPI). The persistently high inflation has fueled speculation that the RBA might raise interest rates again in August.

The US Dollar (USD) gains ground due to higher yields on US Treasury bonds. Friday’s Core PCE Price Index inflation is projected to decrease YoY to 2.6% from the previous 2.8%. This data is seen as the Federal Reserve's (Fed) preferred inflation gauge.