Australian Dollar Stays Near 3-Month Lows

2026-07-02 02:21 By Joshua Ferrer 1 min. read

The Australian dollar remained below $0.690, hovering near a three-month low as investors pared back expectations for further interest rate hikes, while weaker-than-expected trade data weighed on sentiment.

The country unexpectedly posted a AUD 3.02 billion trade deficit in May, the largest since December 2015, as exports slumped to a four-month low, while imports climbed to a fresh record-high.

Markets have also scaled back expectations for further rate hikes as easing global inflation risks after the reopening of the Strait of Hormuz drove oil prices back to pre-war levels.

An August move by the Reserve Bank is now priced in at just 15% chance, while markets see a 50% probability that the tightening cycle has ended.

Meanwhile, the Aussie remained under pressure from a broadly firm US dollar, as investors continued to price in a Fed rate hike in September despite Fed Chair Kevin Warsh saying inflation expectations had eased over the past month.



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