FX.co ★ Aussie Set for 1st Weekly Loss in a Month

The Australian dollar slipped below $0.698 and was heading for its first weekly loss in a month, weighed down by a stronger US dollar as surging oil prices and renewed trade tensions stoked inflation worries. Brent crude pushed above $100 per barrel after Houthi attacks on Saudi oil tankers in the Red Sea, while President Donald Trump threatened further measures against Iran. At the same time, fresh US tariffs on goods from 60 trading partners heightened inflation concerns, bolstering expectations that interest rates may stay higher for longer.

The stronger greenback erased gains in the Aussie that followed better‑than‑expected domestic employment data, even as the jump in oil prices strengthened the case for another Reserve Bank of Australia rate hike. Interest rate markets now assign roughly a 40% probability that the RBA will raise the 4.35% cash rate in August, up from about 10% only a few weeks earlier, with a move by November almost fully priced in. Investors are now looking ahead to next week’s release of second‑quarter inflation data for further guidance on the policy outlook.