Australian Dollar Attempts Rebound

2026-09-18 00:59 By Joshua Ferrer 1 min. read

The Australian dollar rose above $0.71, attempting to recover from a recent four-week low as hawkish comments from the Reserve Bank’s top official reinforced expectations for further policy tightening.

Governor Michele Bullock said upside inflation risks were materializing and warned that higher costs could make inflation more persistent, pointing to rising energy prices and continued capacity pressures in the domestic economy.

Her remarks follow statements over the past month by senior RBA officials that inflation remains elevated and needs to ease further.

Swaps markets now priced at least two more rate hikes by the February meeting, with a roughly 87% chance the first occurs on September 29.

That marks a notable shift from the start of September, when traders were pricing just one further hike, likely by year-end.

The Aussie also benefited from a softer US dollar, alongside lower Treasury yields and easing oil prices, while a rebound in global equities improved risk sentiment.



News Stream
Australian Dollar Attempts Rebound
The Australian dollar rose above $0.71, attempting to recover from a recent four-week low as hawkish comments from the Reserve Bank’s top official reinforced expectations for further policy tightening. Governor Michele Bullock said upside inflation risks were materializing and warned that higher costs could make inflation more persistent, pointing to rising energy prices and continued capacity pressures in the domestic economy. Her remarks follow statements over the past month by senior RBA officials that inflation remains elevated and needs to ease further. Swaps markets now priced at least two more rate hikes by the February meeting, with a roughly 87% chance the first occurs on September 29. That marks a notable shift from the start of September, when traders were pricing just one further hike, likely by year-end. The Aussie also benefited from a softer US dollar, alongside lower Treasury yields and easing oil prices, while a rebound in global equities improved risk sentiment.
2026-09-18
Australian Dollar Holds at 1-Month Low
The Australian dollar held below $0.71, sitting at a four-week low after the Federal Reserve’s first interest-rate increase since 2023 boosted the US dollar, overshadowing expectations for further RBA tightening. The Fed unanimously raised its federal funds rate by 25 basis points to 3.75%-4.00% as expected, citing elevated inflation, while updated projections showed 16 of 18 officials expect at least one more hike this year. Focus now turns to the Reserve Bank of Australia’s September 29 policy decision, with markets pricing an 85% chance of a 25bp increase from the current 4.35% rate and expectations for the cash rate to reach 4.85% by early 2027. The IMF also flagged persistent inflation and rising energy prices as risks that could require further RBA rate hikes. Meanwhile, traders continued to monitor developments in the Iran-US war and its impact on oil prices. Crude remains above $100 per barrel, although prices are easing as Saudi Arabia works to restore pipeline capacity.
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