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AUD/USD justifies hawkish remarks from Reserve Bank of Australia (RBA) Governor Philip Lowe, as well as the RBA's unexpected rate hike, as it advances beyond 0.6650 during Wednesday's Asian session. In doing so, the Aussie pair rises for the fifth consecutive day, reaching the highest levels in three weeks, set the day before, amid a cautious mood ahead of Australia's first quarter (Q1) Gross Domestic Product (GDP) report.

Earlier in the day, RBA Governor Lowe defended the Australian central bank's second consecutive hawkish surprise by stating that the June rate hike was the result of data indicating higher upside risks to the bank's inflation outlook. The official also stated, "Additional tightening of monetary policy may be necessary, depending on the evolution of the economy and inflation."

Notably, Australian Treasurer Jim Chalmers backed the RBA's unexpected rate hike announcement at a press conference on Tuesday, stating, "It is not our expectation that the economy will enter a recession."

On a separate page, prospects for an improvement in US-China and Canberra-Beijing relations join the market's cautious optimism and diminishing hawkish Fed bets to support the AUD/USD pair's ascent.

According to the CME Group's FedWatch Tool, there is a 65% possibility that the Federal Reserve will increase rates by at least 25 basis points in July, as reported by Reuters on Tuesday evening. Notable is the fact that interest rate futures indicate a nearly 15% chance of a June rate increase. The cause may be related to Monday's disappointing U.S. economic data and the Federal Reserve's (Fed) dovish comments prior to the Fed blackout.

In the midst of these moves, S&P500 Futures continue to rise as technology stocks remain stronger but manufacturing stocks weigh on sentiment and limit Wall Street's gains. Nevertheless, US stocks closed with modest gains.

Moving forward, the Australian GDP for the first quarter is anticipated to decline from 0.5% to 0.3% quarter-over-quarter, allowing AUD/USD buyers to recover their breath. However, any unexpectedly good news will not be regarded lightly. China's monthly trade figures and Federal Reserve concerns will also be crucial to monitor.

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