10.09.202502:14:43UTC+00Australian Dollar Approaches 7-Week High

On Wednesday, the Australian dollar rose to over $0.659, nearing its peak in seven weeks, bolstered by a surge in commodity prices. Gold hovered near record levels, driven by the appeal of its safe-haven status and anticipation of interest rate cuts by the Federal Reserve. Concurrently, oil prices increased due to escalating geopolitical tensions in the Middle East, while iron ore saw gains attributed to strong demand from China as steel mills resumed operations following brief closures. Given that commodities constitute a significant portion of Australia’s export portfolio, an increase in their prices enhances export revenues and the terms of trade, thereby boosting demand for the Australian dollar. On the monetary policy front, the market predicts an 86% likelihood of an interest rate cut by the Reserve Bank of Australia in November, though rates are expected to remain stable in September. However, escalating global trade tensions have curbed potential gains for the Australian dollar, which is sensitive to risk. Reports have surfaced that US President Trump is pressuring the European Union to implement 100% tariffs on Chinese and Indian products as a strategy to exert pressure on Russia. Additionally, the United States has indicated a possibility of adopting similar tariff measures.