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RBA view supports Aussie as Brent swings lift dollar and loonie

Brent briefly pushed above $90, reinforcing support for the Canadian dollar and keeping inflation expectations sensitive ahead of Wednesday’s CPI.

Reported · Written up by our desk · Major Pairs

Australian Dollar led gains on Tuesday after the Reserve Bank of Australia refused to declare its tightening cycle finished, according to Action Forex.

The US and Canadian dollars benefited in a different channel, as oil strength moved with shifting expectations around the Hormuz dispute. Action Forex said markets are becoming less convinced Washington and Tehran are moving toward a workable settlement, after Trump raised reparations demands for Iran.

For Canada, stronger crude offered a direct boost to the external outlook, with Action Forex pointing to support from last week’s robust jobs report. For the US dollar, the link was more indirect, as higher oil keeps inflation concerns alive even after weak July payrolls raised the hurdle for another Fed hike.

Action Forex added that oil’s geopolitical premium could persist while the Strait remains unresolved, with $92.87 flagged as a next technical test before $100 is back on the table. Ahead of Wednesday’s CPI, the Brent rebound also gave markets another reason to stay cautious on the timing of further rate moves.

Latest closeWTI crude $82.30 ▲5.3%|Brent $87.85 ▲5.2%

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