Weekly FX Update
10 August 2026
The AUD’s Six-Week Rally Faces Two Big Tests
The Australian dollar enters the week in considerably better shape than it did earlier in the year. AUD/USD finished Friday around 0.7063, completing another positive week and extending its recent recovery.
But this week could decide whether the Aussie finally makes a convincing run above US71 cents. First comes the RBA decision on Tuesday; then US inflation takes centre stage on Wednesday. Softer Australian Q2 inflation has reduced expectations of another immediate RBA hike, while weaker US employment data has shifted attention toward whether American inflation is cooling enough to keep the Fed on hold.
What’s Driving Markets This Week
- RBA decision Tuesday: the cash rate is currently 4.35%, following three increases earlier this year. The RBA decision and accompanying guidance will be the biggest domestic event.
- US CPI Wednesday: after the weaker July jobs report, inflation has become the key question for the Federal Reserve. July CPI and Core CPI are due Wednesday, followed by PPI on Thursday.
· Commodities remain supportive but mixed: gold and silver rallied strongly late last week, while iron ore weakened further. Brent remains elevated around the mid-US$80s.
What’s Happening
The AUD has benefited from improving global risk sentiment and a softer US-dollar backdrop. AUD/USD rose to 0.7063 on 7 August, up 0.43% on the session and about 1.9% over the preceding month.
Australia’s external position also improved: the country recorded a A$1.93 billion trade surplus in June, reversing a revised A$2.37 billion deficit in May. The weaker point for the AUD remains iron ore, which has fallen more than 4% over the past month.
Market Snapshot
| Market | Latest indicative level | Weekly bias |
| AUD/USD | ~0.702–0.703 | Holding above the important 0.7000 area |
| EUR/USD | ~1.16 | Supported by softer USD sentiment |
| GBP/USD | ~1.34 | UK GDP becomes the principal domestic test |
| USD/JPY | ~157.8 | Intervention sensitivity remains high |
| DXY | around 99–100 | Consolidating near important support |
| Brent crude | ~US$84/bbl | Geopolitical premium remains significant |
| Gold | above US$4,300/oz | Strong after its best week since January |
| U.S. 10Y yield | around 4.6–4.7% | Still high enough to provide underlying USD support |
Key Economic Events This Week (Sydney Time)
| Day | Approx. Sydney time | Event | Importance | ||||
| Tue 11 Aug | 2:30pm | RBA policy decision | 🔴 Major AUD event | ||||
| Tue 11 Aug | 3:30pm | RBA press conference | 🔴 AUD | ||||
| Wed 12 Aug | 10:30pm | U.S. CPI | 🔴 Major USD/global event | ||||
| Thu 13 Aug | 5:00pm | UK Q2 GDP | 🔴 GBP | ||||
| Thu 13 Aug | 10:30pm | U.S. PPI | 🔴 USD/inflation | ||||
| Thu 13 Aug | 10:30pm | U.S. jobless claims | 🟠 USD/labour market | ||||
| Fri 14 Aug | Australian session | RBA Governor commentary | 🟠 AUD | ||||
| Fri 14 Aug | 10:30pm | U.S. retail sales | 🔴 USD | ||||
| Fri 14 Aug | 10:30pm | U.S. import/export prices | 🟠 Inflation |
AUD Outlook
The near-term AUD picture is constructive but vulnerable to this week’s event risk.
A relatively hawkish RBA combined with softer US CPI could give AUD/USD another opportunity to test and potentially break 0.7100. Conversely, a dovish RBA message or unexpectedly hot US inflation would favour the USD and could quickly reverse some of the AUD’s recent gains.
Indicative AUD/USD range this week: 0.6980–0.7150.
The important point is that 0.7100 is now the psychological battleground rather than the 0.69–0.70 area we were discussing several weeks ago.
Quick Take
AUD: Positive momentum, approaching 71c
RBA: Tuesday is the key Australian event
USD: Wednesday’s CPI is the major global FX catalyst
Commodities: Precious metals strong; iron ore notably weaker
Risk: A hot US CPI print could quickly change the mood
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