RBA meeting looms as AUD/USD hits four-month low

Last week, the AUD/USD finished lower at 0.6512 (-0.53%), marking a third straight week of declines and its lowest weekly close in almost four months. The decline was fuelled by cooler Australian inflation figures for the June quarter, risk aversion flows, and an unwinding of long AUD/JPY trades after the Bank of Japan raised rates and struck a hawkish tone. $S&P/ASX 200 OPIC (OXJO.AU)$

RBA Governor Bullock noted that the Board debated between a hike and a hold and that "a lot needs to go our way." The reintroduction of a comment at the end of its post-meeting statement that the RBA "will do what is necessary" to return inflation to target reinforced its hawkish bias.