Weekly FX Update
25 May 2026
Oil cools, the dollar eases — but inflation has not left the building
Markets began the week in a more optimistic mood as signs of progress in US–Iran discussions raised hopes that the Strait of Hormuz could reopen. Oil prices fell sharply and the US dollar softened, helping risk-sensitive currencies including the Australian dollar. Reuters reported Brent crude falling below US$98 per barrel and noted gains in the AUD, NZD, euro and sterling against the USD.
For the AUD, this is a supportive start to the week — but the next move is likely to be determined by economic data. Australian inflation on Wednesday, the Reserve Bank of New Zealand decision shortly afterwards, and US inflation and growth data on Thursday night all have the potential to generate significant currency movement.
In simple terms: the market has taken one hand off the panic button, but it is keeping the other hand very close to it.
What’s Driving Markets This Week
- AUD remains relatively steady — holding around the low-0.71 range against USD.
- Oil still elevated — geopolitical risk continues to support crude prices.
- US inflation and GDP data dominate — markets are closely watching PCE and growth figures.
What’s Happening
The Australian dollar has stabilised after recent volatility and is trading around 0.714–0.717 against the USD, supported by commodities and calmer sentiment. Latest RBA and market data show the AUD firming modestly through last week.
At the same time, oil prices remain high and continue to influence inflation expectations and central-bank thinking. Markets now shift attention toward this week’s US economic releases, which may determine whether the USD keeps its recent support.
Key Exchange Rates (approx.)
| Pair | Indicative Level | |||||||||||||||
| AUD/USD | ~0.717 | |||||||||||||||
| AUD/EUR | ~0.615 | |||||||||||||||
| AUD/GBP | ~0.532 | |||||||||||||||
| AUD/JPY | ~113.6 | |||||||||||||||
| AUD/CNH | ~4.85 | |||||||||||||||
| AUD/NZD | ~1.216 | |||||||||||||||
Commodities Snapshot
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Key Economic Events This Week (Sydney Time)
| Day | Date | Time (Sydney) | Event | Why It Matters |
| Thursday | 28 May | 10:30 PM | US GDP (Q1 2nd Estimate) | Economic growth signal |
| Thursday | 28 May | 10:30 PM | US Initial Jobless Claims | Labour market strength |
| Thursday | 28 May | 10:30 PM | US PCE Inflation | Key Fed inflation measure |
| Friday | 29 May | 11:45 PM | Chicago PMI | Business activity outlook |
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This week’s US calendar centres on GDP, Jobless Claims and PCE inflation, all closely watched by FX markets.
AUD Outlook
The AUD continues to hold up reasonably well but remains sensitive to USD movements and inflation headlines.
Expected AUD/USD range this week:
0.710 – 0.725
Key drivers:
- US PCE inflation
- GDP and labour data
- Oil and commodity prices
- Risk sentiment
Quick Take
👉 AUD steady around 0.71+
👉 Oil still supporting inflation worries
👉 Thursday night = big market event window