Australian Dollar Set for Monthly Loss

2026-05-29 02:14 By Joshua Ferrer 1 min. read

The Australian dollar traded around $0.71, on track for a roughly 0.5% monthly decline, as markets sharply reduced expectations for further rate hikes amid signs that earlier monetary tightening is beginning to filter through the economy.

This comes after a softer-than-expected April inflation print and weaker consumer spending data earlier this week, as well as recent signs of cooling in the labor market, prompted investors to sharply cut the odds of a June rate hike to just 5%.

Markets still price in a 70% odds of one final move to 4.6% in the last quarter of the year.

Focus now turns to a raft of economic data next week, including the final manufacturing PMI survey, trade balance, and key GDP figures, which will provide further clues on the economy’s health.

Despite the monthly decline, the Aussie is headed for a modest weekly gain, as reports of a preliminary deal between the US and Iran, including the potential reopening of the vital Strait of Hormuz, lifted global risk sentiment.



News Stream
Australian Dollar Set for Monthly Loss
The Australian dollar traded around $0.71, on track for a roughly 0.5% monthly decline, as markets sharply reduced expectations for further rate hikes amid signs that earlier monetary tightening is beginning to filter through the economy. This comes after a softer-than-expected April inflation print and weaker consumer spending data earlier this week, as well as recent signs of cooling in the labor market, prompted investors to sharply cut the odds of a June rate hike to just 5%. Markets still price in a 70% odds of one final move to 4.6% in the last quarter of the year. Focus now turns to a raft of economic data next week, including the final manufacturing PMI survey, trade balance, and key GDP figures, which will provide further clues on the economy’s health. Despite the monthly decline, the Aussie is headed for a modest weekly gain, as reports of a preliminary deal between the US and Iran, including the potential reopening of the vital Strait of Hormuz, lifted global risk sentiment.
2026-05-29
Aussie Dollar Hits 6-Week Low
The Australian dollar fell to around $0.71, hitting a six-week low as weak household demand reinforced expectations that policy tightening is nearing its end. Data showed household spending fell a sharper-than-expected 1.1% in April as consumers cut back on travel, clothing, and food, with higher fuel costs and geopolitical uncertainty weighing on confidence. The decline added to signs that restrictive monetary policy is cooling demand, even as business investment surged 6.5% in Q1, driven largely by imported data equipment. Markets now widely expect the Reserve Bank to hold rates at 4.35% in June, while the odds of an August hike has more than halved to 40%. Earlier inflation data also supported the shift in sentiment, with headline CPI easing to 0.4% in April and annual inflation slowing to 4.2%, helped partly by fuel tax relief. However, underlying inflation remained elevated at 3.4%, still above the RBA’s target range, reflecting ongoing spillovers from higher global energy costs.
2026-05-28
Aussie Dollar Dips on Softer CPI Data
The Australian dollar weakened to around $0.71, hitting a one-week low as softer-than-expected inflation data reduced expectations of further rate hikes. Data from the Australian Bureau of Statistics showed April's monthly CPI eased to 0.4% from a seven-month high of 1.1%, while the annual rate slowed to 4.2% from 4.6%, below forecasts of 4.4%, partly reflecting a government fuel tax cut. However, underlying inflation remained sticky, with the trimmed-mean measure of core inflation rising 0.3% on the month, in line with estimates, and 3.4% year-on-year, marking the highest since late 2024 and further above the Reserve Bank’s 2–3% target band, as higher oil prices linked in the Middle East conflict fed through the broader economy. Still, markets scaled back tightening expectations, with swaps now pricing a 96% chance of the central bank holding the cash rate at 4.35% in June, up from 84% before the data. Pricing for an August rate hike was also reduced to 24% from 45% previously.
2026-05-27