Weekly FX Update
24 August 2026
The AUD has finally moved higher — now inflation gets the final word
The Australian dollar begins the week in a stronger position, with the latest official RBA reference rate showing AUD/USD at 0.7145.
That is a meaningful improvement from the 0.69–0.70 range that dominated much of July and early August. The AUD has been supported by a softer US dollar, resilient commodity prices and a market reassessment of US rate expectations.
However, this week is a serious test. Australia releases July CPI on Wednesday morning, while the United States releases Q2 GDP and July PCE inflation on Wednesday night Sydney time. The week then finishes with the Jackson Hole central-bank symposium, where markets will be watching Fed Chair Kevin Warsh closely for signals on inflation, rates and the Fed’s communication strategy.
Oil is also back near uncomfortable levels, with Brent around the low-to-mid US$90s per barrel and WTI in the mid-US$80s. That keeps inflation risk alive and means the market may remain sensitive to geopolitical headlines.
In simple terms: the AUD has climbed above 0.71, but this week it has to walk past CPI, PCE and Jackson Hole without tripping over oil.
What Is Driving the Australian Dollar?
- AUD/USD has broken higher
The AUD’s move above 0.71 is important because it marks a clear improvement from the July range. The next question is whether this is a genuine trend shift or simply a softer-USD move ahead of major event risk. - Australian CPI is the key domestic event
July CPI is due Wednesday at 11:30am Sydney time. A stronger result would reinforce the RBA’s inflation concerns and may support the AUD through higher local rate expectations. A softer result could reduce that support and put more pressure on AUD/USD to hold its recent gains. - The RBA remains on hold, but not relaxed
The RBA cash rate is 4.35%, with the next update scheduled for 29 September. With inflation still above target, markets will use this week’s CPI data to judge whether the RBA can remain patient or whether tightening risk needs to be repriced. - US PCE and GDP are the main global data releases
The US releases Q2 GDP second estimate and July personal income/outlays, including PCE inflation, on Wednesday night Sydney time. This is the week’s major USD data cluster. Sticky PCE inflation would support the USD; softer inflation would likely help AUD/USD hold above 0.71. - Jackson Hole is the main policy event
The Jackson Hole symposium runs from 27–29 August. Markets will focus on whether Fed Chair Kevin Warsh gives clearer guidance on inflation, rates and the Fed’s policy framework. A hawkish or unclear message could support the USD and pressure risk-sensitive currencies. - Oil remains a macro wildcard
Oil prices remain elevated because of continuing US–Iran tensions and uncertainty around supply risks. Higher oil can support commodity-linked sentiment, but in the current environment the inflation channel is more important. If oil rises further, markets may move back toward the USD.
Market Snapshot
Currency pair Indicative level Current tone
AUD/USD 0.7145 Firmer, above 0.71
AUD/EUR 0.6108 Broadly steady
AUD/GBP 0.5234 Firmer against sterling
AUD/NZD 1.1966 Stable but still below recent July highs
AUD/JPY 113.49 Supported, but sensitive to risk sentiment
AUD/CNY 4.8026 Firmer, China-sensitive
AUD Trade-Weighted Index 65.9 Stronger overall
Key Economic Events This Week (Sydney Time)
| Date | Sydney time | Event | FX significance | ||||
| Tue 25 Aug | 11:30am | RBA August meeting minutes | Important AUD/RBA guidance | ||||
| Tue 25 Aug | 2:00pm | RBA domestic-markets speech | Secondary AUD/rates event | ||||
| Wed 26 Aug | 11:30am | Australia July CPI | Principal AUD event | ||||
| Wed 26 Aug | 11:30am | Australia Q2 construction work | Secondary domestic growth signal | ||||
| Wed 26 Aug | 10:30pm | U.S. PCE inflation | Major USD/Fed event | ||||
| Wed 26 Aug | 10:30pm | U.S. Q2 GDP – second estimate | Growth and rate expectations | ||||
| Wed 26 Aug | 10:30pm | U.S. durable-goods orders | Business-investment indicator | ||||
| Thu 27 Aug | 11:30am | Australia Q2 private capex | Investment and GDP implications | ||||
| Thu 27 Aug | 11:30am | Australia household spending | Domestic-demand indicator | ||||
| Thu 27 Aug | 10:30pm | U.S. advance trade/inventory data | Secondary GDP/USD input | ||||
| Thu–Sat | — | Jackson Hole symposium | Global central-bank policy signals | ||||
| Fri 28 Aug | Around midnight/early Sat Sydney | Fed Chair Warsh – Jackson Hole | Potentially week’s largest USD event | ||||
| Fri 28 Aug | U.S. session | Chicago PMI / final Michigan sentiment | Late-week U.S. activity/inflation expectations | ||||
AUD Outlook
The AUD starts the week with a constructive bias after moving above 0.71 against the USD. The improvement is encouraging, but the currency now faces a concentrated run of inflation and central-bank risk.
The most supportive outcome for the AUD would be firm Australian CPI, softer US PCE inflation, stable oil prices and a balanced Jackson Hole message. That combination would support the view that the AUD can hold above 0.71 and potentially test higher levels.
The less favourable outcome would be soft Australian CPI, sticky US PCE inflation, a hawkish or unclear Fed message, and another rise in oil prices. That would likely revive USD demand and could pull AUD/USD back toward the 0.70–0.71 area.
For businesses with upcoming USD payments, the key risk windows are Wednesday morning, Wednesday night, and Friday night Sydney time. For GBP, EUR and JPY exposures, broader USD direction and global risk sentiment are likely to dominate.
Quick Take
AUD-positive scenario: Australian CPI is firm, US PCE softens, Jackson Hole is balanced, and oil stabilises.
AUD-negative scenario: Australian CPI underwhelms, US inflation remains sticky, oil rises again, or Fed communication strengthens the USD.
This week’s reminder: The AUD has climbed above 0.71 — now it just needs inflation, oil and central bankers to not push it back down the stairs.