03.08.202601:15:43UTC+00Australian Dollar Near 7-Week High

The Australian dollar climbed above $0.70, nearing a seven-week high, as broad US dollar weakness and renewed hopes for diplomatic talks in the Middle East offset diminishing expectations of further domestic interest rate hikes. Market pricing now implies virtually no chance that the Reserve Bank of Australia will raise rates at its August meeting, and only roughly even odds of a move by December, after weaker-than-expected second-quarter inflation data reduced pressure for additional policy tightening.

Even so, the RBA governor has recently cautioned that another rate increase may still be required to bring inflation back to target. At the same time, Japan’s confirmation last week of coordinated yen-buying intervention with the US Treasury has broadly weighed on the US dollar, providing additional support for the Australian currency.

In parallel, US President Donald Trump said peace talks with Iran will resume today, following calls from key Middle Eastern allies for a diplomatic resolution and the reopening of the Strait of Hormuz. That development eased concerns over potential supply disruptions and pushed oil prices lower.