FX.co ★ Aussie Heads for Heavy Weekly Loss

The Australian dollar slipped to around $0.711, hitting a two-week low and heading for a weekly decline of about 1%, as a prolonged stalemate in Middle East tensions dampened risk appetite and the Reserve Bank of Australia signaled a cautious, wait-and-see stance. The RBA has already raised rates three times this year, and Governor Michele Bullock noted that these increases are beginning to work their way through the economy. Still, she stressed that inflation remains uncomfortably high and that policymakers will stay vigilant against persistent price pressures. Markets largely expect the RBA to hold rates steady in June, while pricing in roughly a 50% chance of another hike in August and fully expecting a move by December. Investors are now focused on any nuance in messaging as Deputy Governor Andrew Hauser is scheduled to speak later today, though he is widely expected to reaffirm a steady policy outlook. Broader risk sentiment was further undermined by a fragile US–Iran ceasefire, reports of stalled negotiations, and a pullback in AI-related trades, all of which weighed on the risk-sensitive Australian dollar.