Australian Dollar Rallies as Market Anticipates Key Economic Data

The Australian dollar has been one of the biggest rebounding currencies in the last margin of trade, rising 0.1% to $0.6290. That jump builds off an already massive one-week gain of 4.1%, showing the currency’s biggest weekly increase in five years. This resurgence comes just as a flurry of major economic moments await. Specifically, the Reserve Bank of Australia (RBA), which meets for policy deliberations on Tuesday,

Given the potential ramifications, analysts are watching the RBA’s every move. Specifically, they are looking for clues in the minutes of the most recent policy meeting, to be released along with the meeting itself. Investors are preparing for Australia’s jobs data to be published on Thursday, which could further impact the currency’s performance.

The AUD widened up the losses last week, recovering all losses since the 2nd of April, to close on $0.6299. It is still well short of the $0.6409 2025 cap. According to market sentiment, more gains are likely ahead of us.

Kristina Clifton, an economist at the Commonwealth Bank of Australia, said she anticipates the Australian dollar will strengthen this week. She’s confident those positive trends will fuel its continuing upward momentum. She noted that “AUD/USD can receive additional support if Chinese policymakers announce policy support to shield their economy from U.S. tariffs.”

Investors are anxiously awaiting New Zealand’s quarterly Consumer Price Index (CPI) numbers, which can be a huge market mover. We’ll know more about those numbers later this week. This data has the potential to change trading trends throughout the region, including the Australian dollar.

A wider trend under current market conditions seems to be at work, one that might support the Australian dollar. This is even more the case if the rotation away from U.S. assets persists. Swaps indicate that a quarter-point rate cut by the RBA for May is fully priced in by the market. Despite this significant cut, there’s still a 1-in-5 chance of an even larger half-point reduction.