Australian Dollar Hits 4-week High

The Australian dollar edged up to around US$0.70, reaching its highest level in more than two weeks as hawkish RBA signals and a broadly weaker US dollar supported the currency. Minutes from the Reserve Bank latest meeting highlighted persistent cost-of-living pressures and the risk of further price increases, keeping the door open for additional rate hikes. Markets are pricing in a 28% chance of another rate increase at the November 3 meeting and about 50% odds of a December move. Focus now turns to employment data due Thursday, with the economy expected to add 20,000 jobs, down from 39,500 in August, while the unemployment rate is forecast to hold steady at 4.6%. Third-quarter CPI data will also take center stage later this month, with core inflation risks remaining elevated above the RBA's 2%–3% target range. Meanwhile, the Aussie drew further support from a weaker US dollar after the Federal Reserve signaled only one more rate hike this year, but no further tightening in 2027.

The Australian dollar traded below $0.70, near multi-month lows as investors assessed minutes from the Reserve Bank of Australia’s September meeting. The central bank warned that several upside risks to inflation identified earlier had materialized or were building, adding that further cash rate increases remained possible if needed. Markets are now watching November’s meeting, with a fifth rate hike this year on the table if upcoming third-quarter inflation data show persistent price pressures. The RBA also highlighted rising global costs, escalating Middle East tensions and oil prices above levels assumed in its August forecasts as key inflation risks. Attention now turns to the September employment report due Thursday and the Q3 CPI data expected later this month for clues on the RBA’s next move. Meanwhile, the US dollar climbed to an 18-month high, fueled by safe-haven demand as geopolitical risks rose after renewed attacks on energy infrastructure in the Middle ?East and Ukraine.

The Australian dollar rose toward $0.70, hitting its strongest level in two weeks as a sharp decline in US Treasury yields weighed on the greenback. A rally in US government bonds pulled yields down from a 24-year peak, offering some relief to global markets after weeks of heavy selling. The drop in yields helped the Aussie finished 0.4% higher on Friday, its first weekly gain in five weeks. Attention is now turning to Australia's September employment report due next Thursday, following an unexpected rise in the unemployment rate to 4.6% in August. A further increase in joblessness would strengthen the case against another Reserve Bank of Australia rate hike after last month's increase lifted the cash rate to 4.60%. Markets are pricing in around a 30% chance of a hike in November, rising to 46% in December. The central bank's October 13 meeting minutes will also be on focus, as well as the September-quarter CPI report later this month, with core inflation expected to remain elevated.