Australian Dollar Hits 7-week Low

AUDUSD decreased to 0.71, the lowest since April 2026. Over the past 4 weeks, Australian Dollar US Dollar lost 2.13%, and in the last 12 months, it increased 9.12%.

The Australian dollar fell to around $0.711, touching a two-week low and on track for a weekly drop of roughly 1%, as an ongoing stalemate in Middle East tensions weighed on risk appetite, while the Reserve Bank signaled a wait-and-see approach. The central bank has already delivered three hikes this year, and Governor Michele Bullock said the rate increases are starting to filter through the economy. However, she reiterated that inflation remains elevated and policymakers will remain alert to persistent price pressures. Markets expect the RBA to stand pat in June, with about a 50% odds of another hike in August and full pricing for a move by December. Investors now watch any shift in tone as Deputy Governor Andrew Hauser is due to speak later today, although expectations are he will reinforce a steady policy stance. Broader sentiment was further hit by a fragile US-Iran ceasefire, reports of stalled negotiations, and a pullback in AI-linked trades, weighing on the risk-sensitive AUD.

The Australian dollar held below $0.715, staying near a two-week low as renewed hostilities in the Middle East dampened risk sentiment, while upbeat domestic trade data offered support. Australia's trade position returned to a surplus of AUD 1.79 billion in April from a deficit of AUD 1.02 billion in March, driven by a rebound in iron ore and coal exports, while import growth remained robust. Earlier this week, softer Q1 GDP readings reinforced signs that the Reserve Bank’s three rate hikes this year are cooling demand and helping contain price pressures. However, fresh attacks in the Middle East and near the crucial Strait of Hormuz have kept energy prices elevated, fueling inflation concerns. Investors now await further clues on the policy outlook, with RBA Governor Michele Bullock set to appear before lawmakers later today and Deputy Governor Andrew Hauser scheduled to speak on Friday. Markets have ruled out another rate hike this month, but remain evenly split for a move in August.