Australian Dollar Set for Weekly Advance

2026-07-03 02:39 By Czyrill Jean Coloma 1 min. read

The Australian dollar strengthened for a second straight session to around $0.690 and was on track for a weekly gain, supported by hawkish interpretations of the RBA's June meeting minutes from major banks.

While markets priced in only a 15% chance of an August rate hike and roughly 50% odds that the tightening cycle has ended, CBA said the minutes struck a hawkish tone, citing persistent references to excess demand and capacity constraints as signs the RBA remains alert to inflation risks.

Likewise, ANZ said the minutes reinforced the risk of another rate hike while leaving its core rate call unchanged.

The Aussie dollar also found support from a weaker US dollar after softer-than-expected employment data tempered expectations for further Fed rate hikes.

Meanwhile, Australia's S&P Global Composite PMI was revised up to 50.4 in June from a preliminary estimate of 49.8, driven by a return to expansion in services activity (50.5 vs 48.7) and stronger manufacturing growth (51.5 vs 50.7).



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Australian Dollar Set for Weekly Advance
The Australian dollar strengthened for a second straight session to around $0.690 and was on track for a weekly gain, supported by hawkish interpretations of the RBA's June meeting minutes from major banks. While markets priced in only a 15% chance of an August rate hike and roughly 50% odds that the tightening cycle has ended, CBA said the minutes struck a hawkish tone, citing persistent references to excess demand and capacity constraints as signs the RBA remains alert to inflation risks. Likewise, ANZ said the minutes reinforced the risk of another rate hike while leaving its core rate call unchanged. The Aussie dollar also found support from a weaker US dollar after softer-than-expected employment data tempered expectations for further Fed rate hikes. Meanwhile, Australia's S&P Global Composite PMI was revised up to 50.4 in June from a preliminary estimate of 49.8, driven by a return to expansion in services activity (50.5 vs 48.7) and stronger manufacturing growth (51.5 vs 50.7).
2026-07-03
Australian Dollar Stays Near 3-Month Lows
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.
2026-07-02
Aussie Under Pressure from Stronger US Dollar
The Australian dollar remained below $0.70, hovering close to three-month lows as a resurgent US dollar continued to dominate currency markets, while the domestic policy outlook remained mixed. Minutes from the Reserve Bank of Australia's June policy meeting showed policymakers continued to see upside risks to inflation and remained prepared to raise interest rates again if needed, having already delivered three rate hikes this year. Despite the hawkish tone, easing oil prices since the meeting have tempered expectations for additional tightening, with markets now assigning just a 15% probability of a rate hike at the August meeting. They also see a 60% chance that the current 4.35% cash rate marks the peak of the tightening cycle, with the first rate cut not expected until late 2027. Meanwhile, the greenback remained broadly firm as strong US economic data underscored the economy’s resilience and reinforced expectations that the Federal Reserve will raise interest rates this year.
2026-07-01