Weekly FX Update
18 May 2026
Oil Is Making Markets Nervous Again
Just when markets were hoping for a quieter week, oil decided to make another entrance.
Brent crude has moved above US$110/bbl, while WTI is trading around US$105–107/bbl, as Middle East supply concerns remain a major focus. Higher oil prices can feed inflation expectations, which tends to support the US dollar and keep central banks cautious.
In simple terms: markets wanted a calm Monday, but oil brought a drum kit.
What’s Driving Markets This Week
- Oil prices remain elevated — inflation concerns are back in focus.
• USD remains supported — higher yields and inflation risks continue to help the dollar.
• AUD has eased from recent highs — AUD/USD is now around 0.715, after trading above 0.72 last week.
What’s Happening
The Australian dollar has softened slightly after a stronger run earlier in May.
The latest RBA published cross-rates for 15 May showed AUD/USD at 0.7160, AUD/EUR 0.6155, AUD/GBP 0.5366, AUD/JPY 113.56, AUD/CNY 4.8700, and AUD/NZD 1.2216.
Key Exchange Rates (approx.)
| Pair | Indicative Level | ||||||||||||
| AUD/USD | ~0.715 | ||||||||||||
| AUD/EUR | ~0.616 | ||||||||||||
| AUD/GBP | ~0.537 | ||||||||||||
| AUD/JPY | ~113.6 | ||||||||||||
| AUD/CNH | ~4.87 | ||||||||||||
| AUD/NZD | ~1.222 |
Commodities Snapshot
Gold fell sharply late last week, with Reuters reporting spot gold around US$4,557.61/oz on Friday, |
Key Economic Events This Week (Sydney Time)
| Day | Date | Time | Event | Why It Matters | |
| Thursday | 21 May | 4:00 AM | US FOMC Minutes | Signals Fed thinking on rates | |
| Thursday | 21 May | 10:30 PM | US Building Permits / Housing Starts | Housing activity and economic momentum | |
| Thursday | 21 May | 10:30 PM | US Initial Jobless Claims | Labour market signal | |
| Thursday | 21 May | 10:30 PM | Philadelphia Fed Manufacturing Index | Regional manufacturing sentiment | |
| Thursday | 21 May | 11:45 PM | US S&P Flash PMIs | Early business activity indicator | |
| Saturday | 23 May | 12:00 AM | US Michigan Consumer Sentiment | Consumer confidence and inflation expectations |
AUD Outlook
The AUD is holding up reasonably well, but momentum has cooled.
Expected AUD/USD range this week:
0.7050 – 0.7250
Key drivers:
- Oil and inflation headlines
- US FOMC minutes
- US labour and PMI data
- China/commodity sentiment
Quick Take
👉 AUD looking steadier
👉 USD still supported, but less dominant
👉 Markets calmer than previous weeks