Weekly FX Update
27 July 2026
The AUD is still near 0.70 — but this week has teeth
The Australian dollar begins the week just below the US$0.70 level, with the latest official RBA reference rate showing AUD/USD at 0.6975.
That keeps the AUD in familiar territory: stable enough to avoid a clear downside break, but not strong enough to convincingly reclaim 0.70. The next move will likely be decided by this week’s major inflation and central-bank events.
The domestic focus is Australian CPI on Wednesday morning. This is the key release before the next RBA meeting in August and will directly influence expectations around whether the RBA can stay on hold or may need to keep a tightening bias.
Globally, markets are watching the US Federal Reserve decision, US GDP and PCE inflation, and the Bank of Japan meeting. Oil remains the wildcard after last week’s spike above US$100/bbl and the weekend pullback.
What Is Driving the Australian Dollar?
1. Australian CPI is the key domestic event
Australia’s June CPI release on Wednesday will be the main local driver for the AUD. A stronger inflation result would increase pressure on the RBA to keep a tightening bias into August. A softer result would reduce that pressure and may limit AUD upside if markets price a more patient RBA.
2. The Fed decision is the main global event
The Federal Reserve meets this week, with markets focused less on the rate decision itself and more on Chair Kevin Warsh’s communication. If the Fed sounds more concerned about oil-driven inflation, the USD may strengthen. If the message is balanced, AUD/USD may have room to test 0.70 again.
3. US GDP and PCE arrive together
US Q2 GDP and June personal income/spending data, including PCE inflation, are due later in the week. This is a major USD event cluster. Strong growth and sticky inflation would support the USD. Softer inflation or weaker growth would be more constructive for the AUD.
4. Oil is still the wildcard
Oil prices pulled back after signs of a pause in US–Iran hostilities, but prices remain well above where they were earlier in July. For FX, the key issue is whether oil stabilises or moves higher again. Another spike would likely increase inflation concerns and support safe-haven USD demand.
5. The Bank of Japan matters for AUD/JPY
The BOJ meets later this week and is expected to keep rates steady, but the tone of its inflation and growth forecasts will matter. A hawkish BOJ message could support the yen and weigh on AUD/JPY. A cautious BOJ tone may leave the yen under pressure.
6. China PMI will shape next week’s AUD tone
China’s July PMI data is due at the end of the week. This will be important for AUD sentiment because China remains Australia’s largest export market. A stronger PMI would support the commodity-demand narrative; a weaker result would reinforce growth concerns.
Market Snapshot
Currency pair Indicative level Current tone
AUD/USD 0.6975 Stable, but still capped below 0.70
AUD/EUR 0.6130 Firmer against the euro
AUD/GBP 0.5241 Firmer against sterling
AUD/NZD 1.2078 Firmer versus NZD
AUD/JPY 114.28 Supported by weak JPY
AUD/CNY 4.7266 Sensitive to China PMI and commodity sentiment
AUD Trade-Weighted Index 65.4 Broadly stable
Key Economic Events This Week (Sydney Time)
Date & time Event Why it matters for FX
Wed 29 Jul, 11:30am Australia — June CPI Main domestic AUD event before the August RBA meeting
Thu 30 Jul, 4:00am United States — FOMC rate decision and Fed statement Key USD event; guidance may matter more than the rate decision
Thu 30 Jul, early morning United States — Fed press conference Important for USD direction and global rate expectations
Thu 30 Jul, 10:30pm United States — Q2 GDP advance estimate Major read on US growth momentum
Thu 30 Jul, 10:30pm United States — June personal income/spending and PCE inflation Fed’s preferred inflation gauge; major USD driver
Thu 30–Fri 31 Jul Bank of Japan monetary policy meeting Important for JPY and AUD/JPY
Fri 31 Jul, 11:30am China — July manufacturing and non-manufacturing PMI Important for AUD and commodity-linked sentiment
Fri 31 Jul, evening Euro Area — July inflation data window Relevant for EUR/AUD
Fri 31 Jul, late evening United States — Consumer sentiment / inflation expectations window Secondary USD and risk-sentiment event
AUD Outlook
The AUD starts the week with a neutral bias, but the event risk is unusually concentrated.
The most supportive outcome for the AUD would be firm Australian CPI, a balanced Fed message, softer US PCE inflation and stable oil prices. That combination would give AUD/USD a better chance of testing and holding above 0.70.
The less favourable outcome would be softer Australian CPI, a hawkish Fed, sticky US inflation and renewed oil strength. That combination would likely keep the AUD below 0.70 and could push it back toward the mid-0.69 area.
For businesses with upcoming USD payments, the major risk windows are Wednesday morning, early Thursday morning, and Thursday night Sydney time. For JPY exposures, the BOJ decision later in the week is the key watchpoint.
Expected AUD/USD trading range: 0.692 – 0.705.
Quick Take
• ✅ Three major central banks meet this week.
• ✅ Oil prices remain the key geopolitical risk.
• ✅ Australia’s economy continues to outperform expectations.
• ✅ Expect higher-than-normal volatility across FX markets.