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Australian dollar slips under 0.7000 as risk tone steadies

The move comes as oil tumbled near 9% on the gap between Washington and Tehran, while traders next focus on Reserve Bank of Australia guidance and Wednesday inflation expectations.

Reported · Written up by our desk · Major Pairs

The Australian dollar traded just below 0.7000 on Monday, holding near flat with a gain of about 0.1% and little intraday range, as the market struggled to push through the 0.7000 level after repeated failed attempts over the prior two weeks, according to FXStreet.

FXStreet linked the otherwise muted FX action to what drove global prices during the session, noting that crude oil fell close to 9% and weighed on the wider energy complex. It said energy declines also pressured liquefied natural gas and coal earnings expectations tied to Australia’s mining-heavy export mix, including an iron ore benchmark that has been below $100 a tonne since late June.

Rather than trading as a direct claim on Australian production, FXStreet said the Australian dollar is being used as a proxy for broader global risk appetite, and that Monday’s “peace bid” was risk-positive enough to offset terms-of-trade damage from weaker energy. It added that the currency’s next major driver is the interest-rate outlook, centered on the RBA’s stance heading into Wednesday.

FXStreet pointed to the RBA having lifted the cash rate to 4.35% across three increases this year, with further tightening left explicitly available at the June hold. It cited consensus expectations for Wednesday’s June inflation report of 0.2% month on month for the headline, down from a prior 0.7% fall, and said rates expectations already imply another quarter-point move within six months, making a weaker print more likely to remove the currency’s only near-term bid.

Latest closeWTI crude $81.92 ▼8.3%|Nat gas $2.769 ▼3.5%

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