The Australian dollar held below $0.678, hovering at its lowest levels in nearly two weeks, weighed down by a rebound in the US dollar as investors pared back aggressive bets on Federal Reserve interest rate cuts this year.
A cautious turn in risk sentiment also pressured the aussie, with stocks and commodities retreating sharply from recent highs while Treasury yields rallied. Domestically, investors continued to assess the outlook for Reserve Bank of Australia monetary policy.
Analysts are suggesting that the RBA will trail global peers in shifting to an easing cycle as it has not hiked as aggressively as other central banks, probably resulting in shallower or later cuts.
Moreover, inflation in Australia proved more persistent than in other economies, with RBA Governor Michele Bullock saying recently that the challenge is “increasingly homegrown and demand-driven”.
A cautious turn in risk sentiment also pressured the aussie, with stocks and commodities retreating sharply from recent highs while Treasury yields rallied. Domestically, investors continued to assess the outlook for Reserve Bank of Australia monetary policy.
Analysts are suggesting that the RBA will trail global peers in shifting to an easing cycle as it has not hiked as aggressively as other central banks, probably resulting in shallower or later cuts.
Moreover, inflation in Australia proved more persistent than in other economies, with RBA Governor Michele Bullock saying recently that the challenge is “increasingly homegrown and demand-driven”.