Australian Dollar Eases from 3-Year Highs

2026-02-06 02:30 By Joshua Ferrer 1 min. read

The Australian dollar held its recent losses below $0.70 on Friday, pulling back from three-year highs, as broad-based selling across global stocks and risk-sensitive assets weighed on the currency.

The commodity-linked Aussie, often used as a liquid proxy for global risk appetite, came under pressure after a tech-led equity rout, fuelled by concerns over massive AI spending, unsettled investors.

The retreat also unwound gains from earlier in the week, when the Reserve Bank of Australia lifted its cash rate by 25 basis points to 3.85% and signaled it could tighten further if inflation proves persistent.

RBA Governor Michele Bullock reiterated that restrictive policy remains necessary to cool demand and ease price pressures.

Markets are pricing about a 70% chance of a May hike to 4.10%, while assigning only a 50% probability of a further increase to 4.35% by year-end.

Focus now turns to upcoming household spending figures next week for further cues on the policy outlook.



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Australian Dollar Eases from 3-Year Highs
The Australian dollar held its recent losses below $0.70 on Friday, pulling back from three-year highs, as broad-based selling across global stocks and risk-sensitive assets weighed on the currency. The commodity-linked Aussie, often used as a liquid proxy for global risk appetite, came under pressure after a tech-led equity rout, fuelled by concerns over massive AI spending, unsettled investors. The retreat also unwound gains from earlier in the week, when the Reserve Bank of Australia lifted its cash rate by 25 basis points to 3.85% and signaled it could tighten further if inflation proves persistent. RBA Governor Michele Bullock reiterated that restrictive policy remains necessary to cool demand and ease price pressures. Markets are pricing about a 70% chance of a May hike to 4.10%, while assigning only a 50% probability of a further increase to 4.35% by year-end. Focus now turns to upcoming household spending figures next week for further cues on the policy outlook.
2026-02-06