The Australian dollar edged above $0.705 but remained near a two-month low as markets weighed easing tensions in the Middle East against persistent domestic cost-of-living pressures. Household sentiment deteriorated further into deep pessimism, with the Westpac–Melbourne Institute Consumer Sentiment Index dropping roughly 3% to 80.6 in June—its fourth decline this year and one of the weakest readings in decades. Respondents cited ongoing pressure from elevated living costs, while a temporary fuel tax cut provided only modest and short-lived relief.
Against this backdrop, investor focus has shifted to next week’s Reserve Bank of Australia policy meeting, where interest rates are widely expected to be left unchanged. Globally, risk appetite received a slight boost after Iran and Israel announced a halt in hostilities. Even so, the safe-haven US dollar stayed firm, supported by uncertainty surrounding a potential US–Iran peace agreement and heightened expectations of a hawkish Federal Reserve following stronger-than-expected US employment data.
