The Australian dollar was little changed around $0.71 on Monday, hovering near a two-week high as traders awaited progress in Middle East peace negotiations and a series of key domestic data releases later in the week. Upcoming indicators — including April’s trade balance, the Q1 current account, and GDP figures — are expected to shed light on the economy’s underlying momentum and help refine expectations for the Reserve Bank’s policy path.
The central bank has already raised interest rates three times this year, but recent downside surprises in both employment and inflation data have prompted investors to sharply scale back the likelihood of another hike in June, with markets now assigning only about a 5% probability to such a move. Even so, futures still imply roughly a 70% chance of one final increase to 4.6% in the final quarter of the year.
At the same time, global oil prices extended their gains and the safe-haven US dollar strengthened, as a US–Iran ceasefire deal remained out of reach, geopolitical tensions in the Middle East stayed elevated, and efforts to fully reopen the Strait of Hormuz made little headway.
