Australian Dollar Slips Amid Uncertainty Ahead of RBA Meeting
The Australian dollar slipped on Monday after six weeks of gains, with traders awaiting the Reserve Bank of Australia's (RBA) policy meeting on Tuesday. The RBA is expected to leave interest rates unchanged at 4.35%, but uncertainty remains about how hawkish policymakers will sound.
The Aussie lost 0.1% to $0.7063 after rallying 0.6% on Friday to a seven-week high of $0.7078. The currency has gained 2.5% in the second half of the year so far, with bulls eyeing recent tops of $0.7089 and 72 cents.
The Reserve Bank of Australia has hiked interest rates three times this year to fully reverse the amount of policy easing made in 2025. As a result, the economy has slowed, inflation readings have come in lower than expected, and the housing market has weakened by more than what the central bank expected.
Rodrigo Catril, a senior FX strategist at the National Australia Bank, noted that while markets expect no change in interest rates, 'inflation risks remain elevated.' Any hawkish language or upward inflation revisions could see markets revive discussions of a further rate hike later this year.