Home Daily Commentaries The Aussie dollar has experienced a modest appreciation against the U.S. dollar

The Aussie dollar has experienced a modest appreciation against the U.S. dollar

Brett Ottawa
Written by
Brett Ottawa

Brett Ottawa

OFXpert

Brett brings a wealth of experience, boasting more than 15 years in the foreign exchange market.

| Thursday 26 June, 2025

Daily Currency Update

Over the past 24 hours, the Australian dollar (AUD) has experienced a modest appreciation against the U.S. dollar (USD). As of the latest data, the AUD/USD exchange rate stands at approximately $0.6502, reflecting a 0.20% increase from the previous day. This uptick is attributed to a broader market risk rally following the announcement of a fragile ceasefire between Israel and Iran. The truce, brokered by U.S. President Donald Trump, has led to increased investor optimism, reducing demand for the safe-haven U.S. dollar and benefiting risk-sensitive currencies like the Australian dollar. Additionally, expectations of a potential interest rate cut by the Reserve Bank of Australia (RBA) have contributed to the AUD's positive performance. This anticipated rate adjustment aims to provide mortgage relief and stimulate economic activity. On the data front yesterday, the annual Consumer Price Index (CPI) rose by 2.1% in the 12 months to May 2025, down from 2.4% in April. This marks the first time since August 2021 that inflation has fallen within the RBA's target range of 2–3%. Underlying inflation, measured by the trimmed mean, also declined to 2.4% in May, the lowest level since November 2021. Contributing factors to this decrease include falling petrol prices and easing rent increases. In response to these developments, financial markets are pricing in a high probability of a 25-basis point rate cut by the RBA at its upcoming meeting on July 8, 2025.

Key Movers

The US dollar is trading with minor gains on Wednesday, trimming losses after a nearly 1.30% decline on the previous two days. Markets have turned more cautious as the enthusiasm about the ceasefire in the Middle East ebbs, although investors’ hopes that the Fed will cut rates over the next months are limiting upside attempts. On Tuesday, Fed Chairman Jerome Powell resisted President Trump's calls for a rate cut and the divergence within the central bank’s monetary policy committee and confirmed that the central bank is not rushing to cut rates. Powell reiterated that the bank was well-positioned to react to a likely increase in prices as the impact of Trump’s tariffs filter through the US economy and weigh on economic activity. U.S. stock markets experienced a mixed session, reflecting investor caution amid geopolitical developments and economic data. S&P 500 closed virtually unchanged at 6,092.16, just 0.8% below its record high. Nasdaq Composite gained 0.3%, ending at 19,973.55, driven by strength in technology stocks. Dow Jones Industrial Average declined 0.2%, closing at 42,982.43, influenced by sector-specific challenges.

Expected Ranges

  • AUD/USD: 0.6400 - 0.6600 ▲
  • AUD/EUR: 0.5500 - 0.5700 ▲
  • GBP/AUD: 2.0850 - 2.1050 ▼
  • AUD/NZD: 1.0650 - 1.0850 ▲
  • AUD/CAD: 0.8800 - 0.9000 ▼

Written by

Brett Ottawa

OFXpert

Brett brings a wealth of experience, boasting more than 15 years in the foreign exchange market. He started his foreign exchange career with OFX more than a decade ago, as a private dealer catering to individual clients. He later transitioned to the corporate sector, assuming the position of Corporate Senior Relationship Manager. What truly excites Brett is the opportunity to engage with people, supporting their business growth and sharing in their successes.

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