2026.06.1901:03:05UTC+00Aussie Heads for Weekly Loss

The Australian dollar remained below $0.705, hovering near ten-week lows and heading for a modest weekly loss, pressured by a stronger US dollar and fading expectations of further RBA rate hikes. Markets are increasingly convinced the Reserve Bank of Australia has ended its tightening cycle after it left the cash rate unchanged this week, with the probability of one additional hike this year falling to around 50%. Governor Michele Bullock reiterated that further tightening is still possible if inflation remains elevated, but traders now believe only a significantly higher second-quarter inflation print would prompt another move.

At the same time, the US dollar index climbed to a one-year high after the Federal Reserve’s hawkish pause led markets to ramp up bets on more rate increases. Nearly half of Fed policymakers projected at least one additional hike this year amid persistent inflation concerns. Elsewhere, reports of a US–Iran interim agreement and the resumption of energy shipments through the Strait of Hormuz lent some support to the risk-sensitive Australian dollar.