06.02.202602:30:20UTC+00Australian Dollar Eases from 3-Year Highs

The Australian dollar remained below $0.70 on Friday, maintaining its recent losses as it retreated from its highest point in three years. The decline stemmed from widespread selling in global stocks and risk-sensitive assets, adversely affecting the currency. The Aussie dollar, which is closely linked to commodities and often reflects global risk appetite, faced pressure following a significant downturn in tech stocks. This downturn was driven by investor concerns over substantial spending in the AI sector. Earlier in the week, the currency had experienced gains after the Reserve Bank of Australia increased its cash rate by 25 basis points to 3.85% and indicated the possibility of additional tightening if inflation remained high. RBA Governor Michele Bullock emphasized the necessity of restrictive policy to manage demand and reduce price pressures. Market predictions currently estimate a 70% chance of a rate hike in May to 4.10%, with only a 50% likelihood of reaching 4.35% by the end of the year. Attention now shifts to forthcoming household spending data, which will provide further insights into the policy direction.