05.11.202602:04:29UTC+00Australian Dollar Rebounds from 2-Week Low

The Australian dollar climbed back above $0.70, rebounding from a recent two-week low as a softer US dollar and improved global risk sentiment boosted demand for risk-sensitive currencies. Global markets rallied after Democratic gains in the US midterm elections heightened expectations of progress toward resolving the US-Iran conflict, a development that also drove a sharp drop in oil prices. Domestically, stronger-than-expected trade data offered additional support, with Australia’s trade surplus widening to its largest level in seven months and defying forecasts of a return to deficit. At the same time, the Reserve Bank of Australia’s latest quarter-point rate increase to 4.85%—its fifth hike this year—continued to underpin the currency by enhancing yield appeal. Still, the 6–3 split vote and more cautious policy guidance have strengthened expectations that the RBA may pause in December. Governor Michele Bullock emphasized that the case for further tightening remains uncertain, though persistent inflation pressures mean another rate rise cannot be ruled out.