Hawkish RBA Pushes Aussie Dollar Higher
AUD
The Aussie Dollar puts on a performance, crushing highs against all the majors fueled by hawkish tones sounded by the RBA. Asian equities were strong into the close, with the ASX closing up 1.7% and the SHANGHAI COMP up 0.1%. Locally, RBA Deputy Governor Andrew Hauser spoke at a lunch event hosted by the Australian Chamber of Commerce and Industry. He cautioned that inflation remains “too high”, citing three factors that drove the recent monetary policy shift. Better than expected global growth due to trade resilience and the AI-tech cycle, stronger than expected credit growth and loosening in financial conditions due to rate cuts and a slower but subsequently stronger rebound in private demand. This tone came off more Hawkish than their previous stance, raising markets perception of further rate hikes this year. Looking to China, their CPI y/y came in softer at 0.2%, expected to decline to 0.4% from 0.8%; and their PPI y/y read -1.4%, expected at -1.5%. Although the figure comes in below market expectations, it signals a stabilization in disinflationary pressures and supports Asian-linked currencies, including the Aussie. MI Inflation Expectations is set to be released today, previously reading 4.6%.
USD
The AUDUSD sees further gains, with the pair breaking a new 3 year high, claiming the 0.71 handle yesterday, opening this morning at a rate of 0.7126. Wall St was soft into the close with the S&P 500 trading +0.2%, the Nasdaq +0.1%, and the Dow Jones unchanged.. US Jobs data was released last night, seeing strong results across the board; with average Hourly Earnings m/m came in at 0.4%, estimated at 0.3% from 0.1%. The Unemployment Rate dropped to 4.3%, estimated to remain at 4.4% and the Non-Farm Employment Change came wildly over at 130k, estimated at 66k. We saw a small gain in US strength off the back of this, but not enough to encompass the Aussie Dollar’s gains. Expectations of 2026 FOMC rate reductions eased, with USD OIS pricing now showing a 17bps (70%) cut priced for June (pre print at 100%) and a total of 50bps of cuts by end 2026 (pre print 59bps). Tonight will see Unemployment Claims, expected to slightly tick down to 222k from 231k.
EUR
The AUDEUR pushes to fresh yearly highs, breaking the elusive 0.60 barrier overnight, opening this morning at a rate of 0.6003. European equities saw a backstep into the close, with the DAX down -0.5% and the CAC down -0.2%. Italian Industrial Production m/m was released last night, reading -0.4%, expected at -0.6% from 1.5%. Today there is no data set to be released.
GBP
The AUDGBP follows the trend and goes vertical, seeing 18-month highs, opening this morning at a rate of 0.5228. British equities saw solid gains into the close, with the FTSE finishing up +1.1%. Last night saw MPC member Mann Spoke, offering no statements that affected the markets. Tonight, will see GDP m/m, expected to soften to 0.1% from 0.3%, and the prelim figure expected to raise to 0.2%, from 0.1%.
NZD
The AUDNZD eclipses reality with its gains, knocking on the 1.18 handle, opening this morning at a renewed 13-year high of 1.1783. There was no news out yesterday, nor will there be any today. Tomorrow will see Visitor Arrivals m/m and Inflation Expectations q/q.