Australian dollar nears 3-month peak as US dollar weakens
The Australian dollar holds above $0.71 near a twelve-week high as broad US dollar weakness supports it, while markets await Australia’s July inflation data on Wednesday.
The Australian dollar held above $0.71, approaching a twelve-week high as broad weakness in the US dollar continued to support the currency.
The Aussie finished up 1.2% last week, marking its longest weekly winning streak since 2020, as the greenback came under pressure from concerns over US fiscal policy and the effectiveness of Treasury debt buybacks.
Meanwhile, markets are awaiting Australia’s July inflation data due Wednesday for clues on the RBA's next move.
The central bank kept its cash rate at 4.35% this month, although Deputy Governor Hauser said further hikes remain possible if inflation risks from the Middle East conflict, AI investment and weak productivity materialize.
A weaker labor market has tempered bets for further tightening, but markets still price in roughly a 60% odds of a year-end hike, while a February move is about 68% priced in.
Elsewhere, investors continued to monitor tensions in the Middle East, with the US expected to announce new sanctions against Iran.