Weekly FX Update
03 August 2026
The AUD finally gets through 0.70 — now it needs to stay there
The Australian dollar begins the week in a firmer position, with the latest official RBA reference rate showing AUD/USD at 0.7030. After several weeks of circling the 0.70 level, the AUD has finally moved back above it.
The improvement follows last week’s Australian inflation report, which showed annual inflation easing to 3.8% in the year to June, down from 4.0%. That result reduced immediate pressure on the RBA to raise rates at its next meeting, although inflation remains above target and the Bank is unlikely to sound relaxed.
This week’s local calendar is lighter, with household spending and goods trade the main domestic releases. The bigger driver is likely to be offshore data, particularly the US July employment report on Friday night Sydney time. China’s PMI and trade data will also matter for the AUD because they feed directly into the commodity-demand story.
Oil remains the wildcard. Prices dropped sharply at the start of the week after signs of de-escalation around Iran and Hormuz, but the market is still highly headline-sensitive.
What Is Driving the Australian Dollar?
- The AUD has reclaimed 0.70
AUD/USD has moved back above the 0.70 level on the latest official RBA reference rate. This improves short-term sentiment, but the currency still needs supportive offshore data to hold the move. - Australian CPI reduced immediate RBA pressure
Last week’s inflation result lowered the perceived chance of an August RBA rate hike. That is not automatically AUD-negative because it also supports domestic growth sentiment, but it does reduce one source of interest-rate support for the currency. - The next RBA decision is now the domestic focus
The RBA’s next monetary policy decision is due on Tuesday, 11 August at 2:30pm AEST, followed by the Statement on Monetary Policy and the Governor’s media conference. This week’s household spending and trade data will be viewed through that lens. - US jobs are the main USD risk
Friday night’s US employment report is the key global event. A strong payrolls number, low unemployment rate or firm wage growth would likely support the USD and could push AUD/USD back toward 0.70. A softer report would be more supportive for the AUD. - China remains central to the AUD story
China releases private-sector PMI and trade data this week. Stronger China data would support the AUD through the commodity-demand channel. Weak data would reinforce concerns that China’s growth model remains heavily dependent on exports while domestic demand stays soft. - Oil is calmer, but not calm
Oil fell sharply after signs of de-escalation and possible improvement in Hormuz-related shipping risks. That helps reduce inflation anxiety, but the market remains vulnerable to fresh Middle East headlines.
Market Snapshot
Currency pair Indicative level Current tone
AUD/USD 0.7030 Firmer; back above 0.70
AUD/EUR 0.6110 Broadly stable
AUD/GBP 0.5229 Firmer than mid-July levels
AUD/NZD 1.1980 Softer versus recent highs
AUD/JPY 112.90 Supported, but sensitive to risk sentiment
AUD/CNY 4.7435 Sensitive to China data
AUD Trade-Weighted Index 65.5 Firmer
Key Economic Events This Week (Sydney Time)
Date & time Event Why it matters for FX
Mon 3 Aug NSW Bank Holiday May reduce some local liquidity
Tue 4 Aug, 11:30am Australia — Monthly Household
Spending Indicator, June Important domestic demand signal before the RBA
Tue 4 Aug, 10:30pm United States — June trade balance Secondary USD growth indicator
Wed 5 Aug, 10:15pm United States — ADP employment report,
July Lead-in to Friday’s payrolls report
Thu 6 Aug, 12:00am United States — ISM Services PMI,
July Important read on US activity and inflation pressure
Thu 6 Aug, 11:30am Australia — International Trade in Goods,
June Important for AUD and export-sector sentiment
Thu 6 Aug, 7:00pm Euro Area — Retail sales, June Relevant for EUR/AUD
Fri 7 Aug, during Asian session China — July trade data window Key AUD-sensitive China demand signal
Fri 7 Aug, 10:30pm United States — July non-farm payrolls,
unemployment and wages Main USD and global FX event of the week
AUD Outlook
AUD/USD begins the week above 0.7000, helped by softer domestic inflation, modest USD weakness and reduced expectations of an imminent RBA increase.
Indicative levels
Support: 0.7000, then 0.6950
Resistance: 0.7050, then 0.7100
The most constructive scenario for the AUD would combine resilient Australian household and trade data, stronger Chinese imports and a softer U.S. employment report. That could support a move through 0.7050 toward 0.7100.
The principal downside risk is a strong U.S. jobs report that lifts Treasury yields and reinforces expectations of a September Fed increase. Weak Australian trade figures, disappointing Chinese demand or another geopolitical escalation could also return AUD/USD below 0.7000.
For clients purchasing USD, current levels above 0.7000 may provide an opportunity to progressively cover near-term requirements rather than relying on a further appreciation. Clients receiving USD may consider retaining partial exposure ahead of Friday’s employment report, given the risk of renewed USD strength..
Quick Take
✅ Central-bank meetings are behind us.
✅ US jobs data is now the week’s biggest event.
✅ China’s inflation figures remain important for the AUD.
✅ Oil and geopolitics continue to influence market sentiment.