Aussie Extends Decline Despite Hawkish RBA Minutes

2026-06-30 03:02 By Joshua Ferrer 1 min. read

The Australian dollar fell further below $0.687, extending losses to a fresh three-month low as a stronger US dollar outweighed the RBA’s restrictive policy stance.

Minutes from the Reserve Bank's June meeting showed policymakers agreed interest rates should remain restrictive to curb excess demand and bring inflation back to target even as economic growth slowed.

The board also said they are prepared to raise rates further if needed as developments in the Middle East still pose upside risks to inflation.

Despite the hawkish tone, the recent retreat in oil prices have led investors to pare the risk of another rate hike this year to around 40%, with markets also beginning to price in rate cuts as early as mid-2027.

Meanwhile, the Aussie remained under pressure from a firmer US dollar after the Fed Reserve adopted a more hawkish stance, prompting markets to price in a rate hike as early as September.

The AUD is now headed for an over 4% loss for the month and a 0.5% fall for the quarter.



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Aussie Extends Decline Despite Hawkish RBA Minutes
The Australian dollar fell further below $0.687, extending losses to a fresh three-month low as a stronger US dollar outweighed the RBA’s restrictive policy stance. Minutes from the Reserve Bank's June meeting showed policymakers agreed interest rates should remain restrictive to curb excess demand and bring inflation back to target even as economic growth slowed. The board also said they are prepared to raise rates further if needed as developments in the Middle East still pose upside risks to inflation. Despite the hawkish tone, the recent retreat in oil prices have led investors to pare the risk of another rate hike this year to around 40%, with markets also beginning to price in rate cuts as early as mid-2027. Meanwhile, the Aussie remained under pressure from a firmer US dollar after the Fed Reserve adopted a more hawkish stance, prompting markets to price in a rate hike as early as September. The AUD is now headed for an over 4% loss for the month and a 0.5% fall for the quarter.
2026-06-30
Australian Dollar Hits Fresh 3-Month Low
The Australian dollar depreciated further below $0.690, hitting a fresh three-month low as renewed tensions in the Middle East weighed on risk sentiment. The US and Iran agreed to pause hostilities and resume peace talks over the Strait of Hormuz dispute after days of strikes and counterstrikes on vessels in the Gulf last week. Oil prices climbed, reigniting inflation concerns, while the safe-haven US dollar remained firm, with expectations of interest rate hikes by the Federal Reserve adding to its strength. Meanwhile, the Reserve Bank of Australia on Monday outlined the tools it could deploy during future economic or financial crises, highlighting bond purchases, forward guidance, and liquidity measures should borrowing costs return to very low levels. Attention now turns on Tuesday's release of minutes from the central bank's most recent interest-rate setting meeting. The RBA left the cash rate unchanged at 4.35% at its June meeting following three rate hikes earlier this year.
2026-06-29
Aussie Pressured by Stronger US Dollar
The Australian dollar traded below $0.690, near a three-month low and headed for a heavy weekly loss as the greenback remained broadly firm on expectations of US interest rate hikes. The US dollar has rallied since the Federal Reserve adopted a surprisingly hawkish stance last week, prompting markets to price in a 75% chance of a rate hike as early as September. Meanwhile, expectations for additional tightening by the Reserve Bank of Australia have eased, despite a slight increase in underlying price pressures in May. Investors expect second-quarter inflation to fall short of the central bank’s 8% forecast, reinforcing bets that the tightening cycle already reached its peak. Markets imply only a 50% chance of another hike in the 4.35% cash rate, while some have started pricing in rate cuts in the second half of 2027. The Aussie is also poised for a second straight monthly loss of over 4%, as Middle East tensions and a selloff in tech stocks earlier this month weighed on risk assets.
2026-06-26