FX.co ★ Australian Dollar Rises as Greenback Weakens

On Thursday, the Australian dollar rose above $0.644, marking its second day of gains. This increase came as the US dollar experienced pressure from mounting concerns regarding the fiscal direction of Washington and a lukewarm appetite for Treasury bonds. Market sentiment took a downturn after projections suggested President Donald Trump’s proposed tax plan could increase the national debt by over $3 trillion, sparking fears of potential financial instability in the world’s largest economy. On the domestic front, the Reserve Bank of Australia reduced its cash rate to 3.85% earlier this week, aligning with market expectations. The central bank adopted a dovish stance, pointing to downside risks for the economy and easing inflationary pressures. In a favorable development for the Australian currency, the Commonwealth Bank of Australia adjusted its forecast, predicting the Australian dollar could reach $0.70 in the latter half of 2025, while also warning that heightened global volatility might cause significant short-term fluctuations.