The Australian dollar reaches its highest level in seven weeks, defying soft domestic rate expectations and thin trading conditions.
The Australian dollar rose to 0.7050, its highest level in seven weeks, marking a break above the 50-day Exponential Moving Average near 0.7000. The move occurred despite a narrow 25-pip trading range and a Stochastic RSI pullback from overbought levels.
The rally follows a shift in rate expectations after June-quarter inflation data undershot forecasts. Headline inflation printed at 3.6%, prompting major banks to predict the Reserve Bank of Australia will hold rates at its 11 August meeting. Earlier expectations had priced in further hikes in 2026.
Analysts note the advance lacks clear domestic catalysts, suggesting external factors may be driving the currency’s strength. The 200-day EMA near 0.6900 continues to support the pair, reinforcing a potential base rather than a downtrend.