Aussie Hits Four-Month High as Diverging Rate Outlook Takes Center Stage

The Australian dollar has been steadily rising and is now hovering near its four-month peak. It reached $0.7202, gaining 0.6% last week and resuming its upward trend from a low of $0.6867 in June. The next major test for the Aussie lies at the 2026 high of $0.7277.

The kiwi dollar has been less fortunate, falling 0.2% to $0.5871 after markets priced in an 80% chance of a policy pause from the Reserve Bank of New Zealand. In contrast, markets expect a 67% probability that the Reserve Bank of Australia will raise interest rates for a fourth time in 2026 to 4.6%. This diverging rate outlook has kept the Aussie elevated near a 13-year high at NZ$1.2268.

The upcoming central bank appearances and US inflation data are being closely watched, as they could decide if the Antipodean currency's upward trend has further to run. Reserve Bank of Australia Deputy Governor Andrew Hauser will be interviewed on Tuesday evening, while Assistant Governor Sarah Hunter will speak at a property event in Sydney.

Analysts at the Commonwealth Bank of Australia predict that the Aussie could remain near 72 cents for most of this week if Hauser or Hunter sound hawkish. However, a strong US inflation report could see it ease back to $0.7150.