The Australian dollar declined to around $0.648 on Tuesday, pulling back from a six-month high reached in the previous session, as investors adopted a risk-off stance in response to mounting global economic and trade uncertainties.
Markets remained focused on fiscal developments in the US and shifting tariff policies under the Trump administration, which have contributed to increased market volatility.
Traders also braced for key inflation data in Australia this week, which could prove pivotal in shaping the Reserve Bank of Australia’s policy trajectory.
Last week, the RBA lowered its cash rate to 3.85% as widely expected and signaled the possibility of further easing in response to growing economic headwinds and slowing inflation.
Markets are now pricing in a 65% probability of another rate cut in July, with expectations pointing to a total of 75 basis points in easing by the first quarter of 2026.
