2026.07.0102:11:45UTC+00Aussie Under Pressure from Stronger US Dollar

The Australian dollar held below $0.70, trading near a three-month low as a resurgent US dollar dominated currency markets and the domestic policy outlook remained uncertain. Minutes from the Reserve Bank of Australia’s June meeting showed policymakers still see upside risks to inflation and remain ready to raise interest rates again if necessary, after already implementing three hikes this year. However, despite the hawkish tone, the decline in oil prices since that meeting has dampened expectations of further tightening. Markets now assign only about a 15% probability to a rate increase in August and estimate a 60% chance that the current 4.35% cash rate represents the peak of the tightening cycle, with the first rate cut not anticipated until late 2027. At the same time, the US dollar stayed broadly firm as robust US economic data highlighted the economy’s resilience and strengthened expectations that the Federal Reserve will raise interest rates this year.