Australian DollarQuote - Chart - Historical Data - News

The Australian dollar held its recent gains around $0.708 and is set for its biggest weekly advance since mid-January as surging oil prices amid the expanding Middle East war fueled inflation concerns and raised the risk of further RBA tightening. The Reserve Bank on Thursday already warned that the conflict was a material risk to the domestic economy. Governor Michele Bullock also repeatedly warned about persistent inflation risks, adding that the board remains uncertain whether policy is sufficiently restrictive. A relatively strong jobs report further reinforced the central bank’s view that the economy can withstand tighter policy. This follows back-to-back interest rate hikes by the RBA earlier this week. Markets are still divided on a potential move as soon as May, while an August hike is fully priced in. Meanwhile, following strikes by Tehran across the Gulf, investors weighed signals from the US and Israel indicating restraint in further attacks on Iranian energy infrastructure.

The Australian dollar edged up to around $0.704 on Thursday, after losing more than 1% in the previous session, as investors assessed the latest jobs report. Data showed employment surged by 48,900 in February, well above the forecasted 20,000 gain, underscoring continued labor market resilience. However, the unemployment rate unexpectedly climbed to 4.3%, pointing to a more mixed picture. Still, the rate remains historically low and reinforced the Reserve Bank’s view that the economy can withstand tighter policy. Although they did little to shift rate expectations, with markets still divided on whether another hike could come as soon as May. Meanwhile, the central bank warned that the escalating Middle East war poses material risk to the domestic economy and signaled a more severe global shock, with persistently high inflation likely to add pressure on some households and borrowers. But they also emphasized that Australia’s financial system remains broadly resilient.

The Australian dollar held above $0.701, marching back toward multi-year highs, supported by a hawkish tone from the Reserve Bank after a narrow back-to-back rate hike. The surprise 5–4 split decision underscored a debate over timing rather than direction, with Governor Michele Bullock warning inflation risks remain and signaling policy may not yet be restrictive enough. Markets subsequently raised expectations for another hike as soon as May, with further tightening still priced in by August. Attention now turns to the upcoming jobs report this week and flash PMI figures next week for further clues on the policy outlook and the country’s economic health. Elsewhere, the ongoing Middle East conflict remained in focus, as Iran intensified attacks on energy infrastructures in the region, while US allies pushed back against President Donald Trump’s call to secure shipping through the Strait of Hormuz.