FX.co ★ Australian Dollar Nears Three-Week Low

The Australian dollar fell below $0.645 on Wednesday, marking its third consecutive session of decline and reaching its lowest point in nearly three weeks. This drop occurred as the US dollar gained strength ahead of significant US economic events, notably the release of the Federal Reserve's July meeting minutes and Fed Chair Jerome Powell's upcoming speech at the Jackson Hole symposium. Currently, markets are cautiously anticipating a possible interest rate cut, with an 85% likelihood of a reduction in September and approximately 54 basis points of easing expected by the end of the year. Meanwhile, in Australia, consumer confidence has surged to its highest in nearly four years. This uptick in sentiment follows the Reserve Bank of Australia's third rate cut in 2025, which reduced the cash rate to 3.6%. This rise in consumer sentiment provides some support for the Australian dollar despite ongoing expectations of further rate reductions. Investors currently predict a strong likelihood of another rate cut by November, potentially bringing the rate down to around 3.35%. Some forecasts even suggest the possibility of two or three additional cuts by the end of the year. As investors look for insights into Australia's economic trajectory, the upcoming PMI data will be closely watched.