The Australian dollar (AUD) edged higher against the US dollar (USD) after recent losses. The move follows a calmer tone in global markets and easing US rate expectations.
The Australian dollar (AUD) gained ground on Tuesday, lifting against the U.S dollar (USD) as the USD eased and the Reserve Bank of Australia (RBA) maintained a measured tone on interest rates.
The AUD/USD pair recovered from recent lows near 0.6440, moving higher through the Asian session as U.S. bond yields dipped and traders trimmed positions ahead of key economic data later in the week.
The move followed a softer tone from the U.S. Federal Reserve, with recent comments from policymakers suggesting a slower pace of balance-sheet reduction and a cautious approach to future rate decisions. The change in sentiment pushed the U.S. dollar index lower, allowing risk-sensitive currencies such as the Australian dollar to regain some strength.
At home, the RBA has continued to signal patience as it monitors inflation and labour-market trends. Minutes from the latest policy meeting confirmed that the central bank expects inflation to ease gradually and that any further decisions will depend on economic data. The official cash rate remains at 3.60 per cent, where it has been since earlier this year.
The RBA noted that rising housing prices and strong household spending could delay progress on inflation, but reiterated that monetary policy remains restrictive and is contributing to slower demand.
In recent sessions, improved risk sentiment and a slight rebound in commodity prices have also provided support for the Australian dollar. Iron ore and coal prices held steady, whilst demand for gold and base metals remained solid.
Investors and traders are now watching upcoming data releases, including U.S retail sales and Australian employment figures, for hints as to how the market will move. A positive U.S. report could renew support for the dollar,.
The Australian dollar was trading around 0.6490 U.S. cents at the time of writing, up roughly 0.4 per cent.
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