• AUD/USD surges to near 0.6550 as RBA Bullock prepares to hike interest rates further if needed.
• The Fed is expected to go aggressively on rate cuts amid fears of a potential US slowdown.
• Investors await the US weekly jobless claims data.

The AUD/USD pair climbs to near 0.6550 in Thursday’s European session. The Aussie asset strengthens as Reserve Bank of Australia (RBA) Governor Michelle Bullock delivers a hawkish guidance on interest rates and the US Dollar (USD) corrects on firm Federal Reserve (Fed) rate-cut prospects.

Michelle Bullock said in the Q&A session at Thursday's Rotary Club of Armidale Annual Lecture said the board will not hesitate to hike its Official Cash Rate (OCR) further if needed. She added that central bank will be vigilant to inflation risks. When asked about the inflation outlook, Bullock said. “Don’t expect to be back in 2–3% target range until end of 2025.”

Meanwhile, the market sentiment remains risk-averse on fears of potential global slowdown. S&P 500 futures have posted some losses in the European session. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, edges lower to near 103.00.