FX.co ★ Aussie Dollar Slumps to 7-Month Low

The Australian dollar remained below $0.69, hovering at its weakest level since late March, as soft domestic data and a firmer US dollar pressured the currency. In November, consumer sentiment dropped to a four-year low, while business conditions stayed in negative territory for the first time in six years, underscoring ongoing weakness in the Australian economy.

These disappointing figures strengthened the view that the Reserve Bank of Australia has likely ended its tightening cycle after five rate hikes this year, which pushed the cash rate to an 18-year high of 4.85%. Markets now assign an 82% probability that rates have peaked, with a 25-basis-point cut fully priced in by the end of 2027.

By contrast, stronger-than-expected US core inflation — up 0.3% in October — has boosted expectations of a possible 50-basis-point rate increase by the Federal Reserve next month, supporting the US dollar and adding further downward pressure on the Australian dollar.