Aussie Dips Ahead of RBA Decision as US-Iran Deal Collapses

The Australian dollar weakened over the past 24 hours ahead of today's Reserve Bank of Australia (RBA) policy decision at 2:30 pm AEST. Financial markets expect the cash rate to remain unchanged at 4.35%, although Bloomberg pricing implies a 1.3% chance of a cut.

RBA Governor Michele Bullock's statement will be under scrutiny, as recent inflation data slowdown has reduced expectations of further tightening. The RBA might also consider discussing potential rate hikes due to the gloomy prognosis for the Australian housing market.

In other markets, oil prices surged after a US-Iran deal slipped away. Brent crude gained 5.0% to around $88 a barrel, while WTI rose 5.1% to trade above $82. The higher oil price supported the US dollar overnight, with AUD/USD and NZD/USD down 0.2%.