The Australian dollar held above $0.69 after gaining nearly 1% in the previous session, rebounding from a recent seven-month low as investors shifted back into risk-sensitive currencies amid a softer US dollar and improving global risk sentiment. A recovery in global equities and easing fears over renewed US-Iran tensions supported demand for riskier assets, while lower oil prices further brightened the broader market outlook.
Nonetheless, domestic headwinds continued to pressure the currency. Westpac’s consumer sentiment index fell 2.7% to 78.2 in November, its lowest reading in four years, while business confidence slid to a six-year low. The cautious backdrop has been reinforced by a less hawkish Reserve Bank of Australia: the RBA delivered its fifth rate hike of the year last week in a split 6–3 decision, but abandoned its tightening bias. Interest rate swaps now imply an 80% likelihood that policy rates have peaked, with roughly 30 basis points of cuts priced in by the end of next year.
