The Australian dollar hovered around $0.701, trading near ten-week lows as renewed tensions in the Middle East dampened risk appetite and prompted caution ahead of key domestic data releases this week.
Investors are closely watching May CPI and labor market figures, which will be critical for shaping the Reserve Bank of Australia’s next policy decision. After leaving the cash rate unchanged this month, the RBA signaled that any future moves will depend on incoming data as it evaluates the economic impact of its earlier rate hikes.
Market participants increasingly believe the tightening cycle has likely ended, with an additional rate increase seen as unlikely unless second-quarter inflation significantly overshoots expectations. Traders are also awaiting today’s flash PMI surveys for further insight into growth momentum.
On the geopolitical front, uncertainty surrounding US–Iran peace efforts pushed oil prices higher. President Trump warned of new strikes should Hezbollah persist in its attacks on Israel, while Tehran announced a renewed closure of the Strait of Hormuz, intensifying concerns over global energy supply.
