The Australian dollar inched higher to around $0.709 on Monday, approaching a three-year peak, as the US dollar weakened amid renewed tariff concerns. Over the weekend, President Donald Trump announced an increase in global tariffs from 10% to 15%, following a Supreme Court ruling that struck down a substantial portion of his earlier trade measures.
Australia’s Trade Minister, Don Farrell, said the government is actively reviewing its options and working closely with its embassy in Washington to assess potential impacts, while reiterating Australia’s commitment to free and fair trade.
At the same time, expectations of a rate hike in March are strengthening, underpinned by firmer domestic data and more hawkish signals from policymakers. Markets now put the probability of the Reserve Bank raising its cash rate by May at 76%, with the odds of an earlier move in March rising to about 28%. Investors will be watching key upcoming releases—including January’s monthly CPI and Q4 GDP—closely for indications that could prompt the RBA to act sooner.
