FX.co ★ Australian Dollar Holds 2-Day Decline

The Australian dollar remained subdued around $0.654 on Friday, following two successive sessions of decline, as the currency was pressured by the strengthening US dollar. This appreciation of the greenback came on the heels of unexpectedly robust US data that diminished hopes for more significant rate cuts from the Federal Reserve. Additionally, market sentiment suffered a blow due to US President Donald Trump's announcement of new tariffs. Beginning October 1, a 100% tariff will be imposed by the US on branded and patented pharmaceutical imports, with exemptions granted to companies constructing production facilities within the US. Furthermore, Trump revealed tariffs of 50% on kitchen cabinets and bathroom vanities, alongside a 25% tariff on trucks, which will be effective from the same date. Locally, investor expectations for immediate monetary policy easing by the Reserve Bank of Australia were reduced after recent data showed consumer prices in August were higher than anticipated. The probability of a quarter-point rate cut during next week’s RBA meeting stands at just 6.5%, while the likelihood for a cut in the November meeting is estimated at 38.2%.