FX.co ★ Australian Dollar Gains Amid US-EU Trade Deal

The Australian dollar strengthened to approximately $0.658 on Monday, continuing its upward trajectory from the previous week. This rise is driven by increasing optimism surrounding a newly established trade agreement between the United States and the European Union. This agreement, impacting roughly one-third of global trade, includes a 15% tariff on EU exports and obligates the EU to augment its purchases of U.S. energy products and military equipment. Market confidence was further enhanced by reports suggesting that Washington and Beijing are likely to prolong their current tariff truce by an additional three months. Domestically, the focus of investors is now on the forthcoming release of monthly and quarterly inflation data later this week. These figures will be scrutinized for insights into the Reserve Bank of Australia's forthcoming monetary policy decisions. With the RBA board remaining notably cautious regarding ongoing inflationary pressures, one of the nation’s leading banks has cautioned that a rate cut at the August meeting is far from certain.