NEW YORK — The Australian dollar opened the week lower, declining 0.1 percent to $0.7063 after six consecutive weeks of gains. Traders widely expect the Reserve Bank of Australia to hold its cash rate at 4.35 percent at Tuesday's policy meeting.
Economists surveyed by Reuters unanimously forecast no change, marking the second pause this year. A tightening bias is expected to remain, reflecting persistent inflation concerns.
Rodrigo Catril, senior FX strategist at National Australia Bank, said markets have priced virtually no chance of an August move but that inflation risks remain elevated. He said hawkish guidance, upward revisions to inflation forecasts in the Statement on Monetary Policy, or evidence of internal dissent could prompt traders to raise the probability of a hike later in the year.
The RBA has raised rates three times this year, fully reversing the easing undertaken in 2025. Growth has since slowed, inflation has come in below expectations, and the housing market has weakened more than the central bank anticipated.
Despite the slowdown, bond markets are pricing a 58 percent probability of an additional hike before year-end — a signal that duration positioning remains cautious even as near-term rate risk fades.
The New Zealand dollar eased 0.2 percent to $0.5883, pulling back after a 0.4 percent gain Friday that stalled just short of its recent high.
Both antipodean currencies drew support from a soft U.S. jobs report that led traders to scale back expectations for near-term U.S. rate increases, pushing the U.S. dollar to its lowest level in nearly two months. Wall Street indices closed at record highs on the reduced rate risk.
Assistant Governor Kent will participate in a Reuters Newsmaker interview Thursday. Governor Bullock is scheduled to appear before parliament Friday.
