The Australian dollar extended its decline to around $0.685, falling for a seventh consecutive session and touching its weakest level since January 23. The downturn came as a sharp rise in energy prices, driven by ongoing tensions in the Middle East, darkened the global economic outlook and prompted investors to seek the relative safety of the US dollar. The Aussie lost 2.1% last week, its worst weekly performance since April, and is now on course for a monthly drop of about 3.8%, the steepest since December 2024.
Oil prices have continued to rise as the conflict in Iran entered its fifth week, with renewed attacks in the region heightening risks to global energy supplies. In response, Australian Prime Minister Anthony Albanese announced a temporary reduction in fuel taxes to help alleviate cost-of-living pressures, highlighting the broader economic impact of surging energy prices.
Investor attention now turns to the release of the Reserve Bank of Australia’s latest meeting minutes, following a narrowly decided vote to raise the cash rate to 4.1%. The minutes are expected to shed light on how policymakers are weighing stubborn inflation against signs of a slowing growth outlook.
