Australian Dollar Trades Near Multi-Month Low

The Australian dollar traded around $0.68 after tumbling 2.5% last week to a seven-month low, as a sharp selloff in global equities and rising bets of an imminent US rate hike boosted the greenback. Stronger-than-expected US jobs data and hawkish remarks from Federal Reserve officials lifted expectations of a December rate hike, boosting the greenback to its strongest level in nearly five months. Meanwhile, RBA Assistant Governor Sarah Hunter said there was limited evidence that AI had meaningfully lifted productivity or caused widespread job losses, though it could pose risks to financial stability. Last week, the Reserve Bank of Australia raised interest rates for a fifth time this year in a split 6–3 decision, but dropped its tightening bias. Swaps now imply an 80% probability that Australian rates have peaked, with 30 basis points of easing expected by the end of next year. Traders also await RBA board member Marnie Baker’s speech on Thursday for clues on the policy outlook.

AUDUSD decreased to 0.69, the lowest since July 2026. Over the past 4 weeks, Australian Dollar US Dollar lost 0.96%, and in the last 12 months, it increased 6.22%.

The Australian dollar dropped below $0.69, reaching its lowest level since late March as a sharp selloff in global equities dampened demand for risk-sensitive assets. Often viewed as a proxy for global risk, the Aussie came under pressure as concerns mounted that the Democrats’ sweeping victory in the US midterm elections could lead to tighter regulations on the AI industry. In Australia, uncertainty over the Reserve Bank’s policy path remained in focus after the central bank raised rates for the fifth time this year to an 18-year high. It was met with a closely divided 6–3 vote and less hawkish guidance, boosting expectations that rates had peaked. However, Deputy Governor Andrew Hauser warned that weakening public confidence in the RBA’s ability to control inflation could make disinflation more costly, potentially requiring a more aggressive policy response. Swaps currently imply just a 6% chance of another hike in December, while a quarter-point rate cut is fully priced by year-end.