Australian Dollar Slips Amid Risk-Off Sentiment
The Australian dollar retreated to approximately $0.648 on Tuesday, after reaching a six-month peak earlier. This shift reflects investors' cautious approach amid escalating global economic and trade tensions. Market attention remains on fiscal changes in the United States and evolving tariff strategies under the Trump administration, both of which have heightened market instability. This week, all eyes are also on crucial inflation figures from Australia that could significantly influence the Reserve Bank of Australia's policy decisions. The Reserve Bank lowered its cash rate to 3.85% last week, aligning with expectations, and indicated the potential for further cuts in response to slowing inflation and economic challenges. Currently, there's a 65% chance priced in for an additional rate reduction in July, with projections suggesting a total of 75 basis points to be eased by early 2026.
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