Australian Dollar Sustains Recovery
The Australian dollar held above $0.69 after rising nearly 1% the previous day to recover from a recent seven-month low, as investors rotated back toward risk-sensitive currencies amid a softer US dollar and improving global risk appetite. A rebound in global equities and easing concerns over renewed US-Iran tensions helped lift demand for riskier assets, while lower oil prices further improved the broader market outlook. However, domestic headwinds continue to weigh on the currency, with Westpac's consumer sentiment index falling 2.7% to 78.2 in November, its lowest level in four years. The cautious outlook is compounded by a less-hawkish Reserve Bank of Australia, which raised interest rates for a fifth time this year last week in a split 6—3 decision but dropped its tightening bias. Interest rate swaps now currently imply an 80% probability that rates have peaked, with around 30 basis points of easing priced in by the end of next year.
The Australian dollar held above $0.69 after rising nearly 1% the previous day to recover from a recent seven-month low, as investors rotated back toward risk-sensitive currencies amid a softer US dollar and improving global risk appetite. A rebound in global equities and easing concerns over renewed US-Iran tensions helped lift demand for riskier assets, while lower oil prices further improved the broader market outlook. However, domestic headwinds continue to weigh on the currency, with Westpac's consumer sentiment index falling 2.7% to 78.2 in November, its lowest level in four years.
The cautious outlook is compounded by a less-hawkish Reserve Bank of Australia, which raised interest rates for a fifth time this year last week in a split 6—3 decision but dropped its tightening bias. Interest rate swaps now currently imply an 80% probability that rates have peaked, with around 30 basis points of easing priced in by the end of next year.