Australian dollar edges lower as markets weigh RBA signals and global sentiment

Daily Currency Update

The Australian Dollar (AUD) eased slightly against the U.S. Dollar (USD) on Tuesday, trading near US$0.6528, down about 0.15% for the day. After touching a weekly high of US$0.6540 on Monday, the pair is showing signs of consolidation as investors adopt a cautious stance ahead of key economic data and central bank updates later in the week. Market sentiment remains mixed, with traders balancing optimism about Australia’s economic resilience against uncertainty surrounding global monetary policy. The AUD has found underlying support from recent comments by Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser, who signaled that policymakers remain vigilant on inflation risks. Hauser cautioned that cutting interest rates too soon could undo progress made in bringing inflation back within the RBA’s target range. He emphasized that Australia’s economy has proven more resilient than many had expected, with employment and consumer spending showing steady performance despite higher borrowing costs. These remarks reinforced expectations that the RBA will maintain its tight monetary stance for longer, even as other major central banks, such as the Federal Reserve, hint at the possibility of policy easing in 2025. Meanwhile, the U.S. Dollar continues to draw some strength from steady Treasury yields and a cautious tone in global risk sentiment. Investors remain attentive to upcoming U.S. inflation data and Federal Reserve speeches for further clues on the timing of potential rate cuts. Any signs of sticky U.S. inflation or a stronger-than-expected labor market could lend additional support to the greenback, limiting near-term upside for the AUD/USD pair. From a technical perspective, immediate support for the pair lies near US$0.6500, while resistance is seen around US$0.6560. A sustained break above that level could open the door toward US$0.6600, but momentum appears modest as traders await fresh catalysts. In the short term, the Australian Dollar is likely to remain influenced by shifts in risk appetite, commodity prices, and evolving central bank expectations. While the currency has shown resilience, further gains may depend on clearer signs that inflation pressures are easing globally and that the RBA’s cautious optimism continues to hold.