Australian Dollar Set for Weekly Gains

2026-05-01 02:31 By Czyrill Jean Coloma 1 min. read

The Australian dollar held its gains around $0.72 on Friday, heading for a weekly advance as investors position ahead of next week’s policy decision from the Reserve Bank of Australia.

Markets expect a 25 bps rate hike on May 5, which would mark a third straight increase and lift the cash rate to 4.35%.

Expectations are also building that rates could climb to 4.60% or higher by year-end, as inflationary pressures remain a key concern amid the closure of the Strait of Hormuz, which has disrupted global supply chains.

Australia’s annual inflation rate climbed to 4.6% in March, well above the central bank’s 2–3% target and the highest since monthly CPI reporting began in 2025.

Meanwhile, the manufacturing PMI rose to 51.3 in April, surpassing both preliminary estimate of 51 and March’s reading of 49.8.

Producer prices for final demand increased by 0.4% quarter-on-quarter in Q1 2026, easing from a 0.8% rise in the previous quarter and falling short of market expectations of a 0.9% gain.



News Stream
Australian Dollar Set for Weekly Gains
The Australian dollar held its gains around $0.72 on Friday, heading for a weekly advance as investors position ahead of next week’s policy decision from the Reserve Bank of Australia. Markets expect a 25 bps rate hike on May 5, which would mark a third straight increase and lift the cash rate to 4.35%. Expectations are also building that rates could climb to 4.60% or higher by year-end, as inflationary pressures remain a key concern amid the closure of the Strait of Hormuz, which has disrupted global supply chains. Australia’s annual inflation rate climbed to 4.6% in March, well above the central bank’s 2–3% target and the highest since monthly CPI reporting began in 2025. Meanwhile, the manufacturing PMI rose to 51.3 in April, surpassing both preliminary estimate of 51 and March’s reading of 49.8. Producer prices for final demand increased by 0.4% quarter-on-quarter in Q1 2026, easing from a 0.8% rise in the previous quarter and falling short of market expectations of a 0.9% gain.
2026-05-01
Aussie Dollar Stays Firm on Hot CPI Print
The Australian dollar fell to around $0.71, but stayed near four-year highs as a sharp rise in inflation kept expectations of a rate hike next week. Headline inflation jumped to 4.6% annually in March, slightly below forecasts of 4.7%, but stayed above the Reserve Bank’s 2–3% target and marked the highest since monthly CPI data began in 2025. The annual trimmed-mean measure held at 3.3%, in line with expectations as higher fuel costs stemming from Middle East supply disruptions added to already elevated price pressures. In the absence of a major upside inflation surprise, the Aussie attracted some sellers amid cautious risk sentiment due to persistent geopolitical uncertainties. Still, markets priced in an 80% probability of a 25 bp rate hike next week. In the US and other G-7 economies, policymakers are likely to hold rates steady this week while monitoring the risk of rising energy costs fueling inflation, as the Strait of Hormuz remained effectively closed amid US-Iran tensions.
2026-04-29
Aussie Dollar Holds at Fresh 4-Year High
The Australian dollar held above $0.71, sitting at a fresh four-year high as surging energy prices strengthened expectations of rate hikes ahead of upcoming inflation data this week. Although a ceasefire has mostly been held since early April, efforts to resume peace talks between the US and Iran remained uncertain, while energy flows through the Strait of Hormuz are still constrained. The resulting energy-supply shock continues to fuel inflation risks, reinforcing expectations that central banks will keep interest rates higher for longer or deliver further hikes. In Australia, investors await the upcoming March CPI report due on Wednesday, with headline inflation expected to rise 4.7% year-on-year, well above the Reserve Bank’s 2–3% target. Any upside surprise could solidify bets on a 25-basis-point rate hike at the central bank’s May 5 meeting. Markets are currently pricing in an 80% probability of a third rate hike this year to 4.35%.
2026-04-27