18.03.202601:07:25UTC+00Aussie Dollar Nears Multi-Year Highs

The Australian dollar held above $0.701, climbing back toward multi‑year highs, bolstered by a hawkish signal from the Reserve Bank of Australia following a narrowly approved back‑to‑back rate increase. The unexpected 5–4 split decision highlighted disagreement over the timing rather than the direction of policy, with Governor Michele Bullock warning that inflation risks persist and indicating that policy settings may still not be sufficiently restrictive.

In response, markets raised the probability of another rate hike as early as May, with additional tightening still priced in by August. Investors now look to this week’s labor market data and next week’s flash PMI releases for further insight into the policy trajectory and the broader health of the Australian economy.

On the geopolitical front, the ongoing conflict in the Middle East remained a key focus as Iran stepped up attacks on regional energy infrastructure. At the same time, US allies resisted President Donald Trump’s call for a coalition to safeguard shipping through the Strait of Hormuz.