2026.08.1700:52:18UTC+00Australian Dollar Rises to 10-Week High

The Australian dollar climbed above $0.709, reaching a ten-week high as the Reserve Bank of Australia (RBA) maintained a hawkish stance, while the US dollar weakened on fading expectations of further Federal Reserve rate hikes following softer US data. Recent US figures indicated subdued inflation, alongside weaker consumer sentiment and retail sales. Markets now assign roughly a one-in-three probability to a September Fed rate increase, down from nearly 50% before the latest releases.

In Australia, the RBA kept the cash rate unchanged at 4.35% for a second straight meeting last week. However, Governor Michele Bullock signaled that borrowing costs may still need to rise, citing the continued closure of the Strait of Hormuz and persistently weak productivity growth. RBA Assistant Governor Christopher Kent noted that tighter monetary policy is operating as intended, though its full impact on economic activity and inflation will take time to emerge. Market pricing now implies about a 70% chance of one final rate increase to 4.60% by early next year. Investors will also be closely watching Australia’s July employment report due on Thursday.