AUD/USD extends losses below 0.6500 as investors rush for safety
- The Australian Dollar accelerates its decline with Trump's tariffs crushing risk appetite.
- Fears of a global trade disruption cast a shadow on the Australian economic outlook and are weighing heavily on the Aussie.
- The RBA is expected to cut rates and might convey a dovish statement on Tuesday.
Risk aversion is driving markets on Monday, as markets brace for the reintroduction of April’s “Liberation Day” tariffs and the Aussie Dollar dives on a mix of fears of higher levies on exports to the US and a generalised disruption of global trade.
Australia’s economy is strongly dependent on international trade, and the uncertainty about the global trade outlook is hurting confidence in its currency. The AUD/USD accelerated its decline today and is losing about 0.9% in its third consecutive bearish day.
Risk-sensitive currencies suffer with US tariffs looming
Investors are rushing for safety on Monday, boosting the US Dollar’s recovery as Trump prepares letters to announce some of its trading partners the levies that will be applied to their products. Which one are those countries is still unclear, as US Administration officials touted imminent agreements with some countries, and so is the deadline, as Treasury Secretary Bessent flagged a moratorium to August 1.
Currency markets, however, are expected to remain driven by a negative risk sentiment in the absence of key data to ease investors’ mood.
On Tuesday, the Reserve Bank of Australia is expected to trim its benchmark interest rate by 25 basis points and his highly likely to deliver a dovish message, pointing to the downside risks to the economy from US tariff uncertainty. Tuesday’s monetary policy decision is unlikely to provide any significant impulse to the Australian Dollar.
Economic Indicator
RBA Interest Rate Decision
The Reserve Bank of Australia (RBA) announces its interest rate decision at the end of its eight scheduled meetings per year. If the RBA is hawkish about the inflationary outlook of the economy and raises interest rates it is usually bullish for the Australian Dollar (AUD). Likewise, if the RBA has a dovish view on the Australian economy and keeps interest rates unchanged, or cuts them, it is seen as bearish for AUD.
Read more.Next release: Tue Jul 08, 2025 04:30
Frequency: Irregular
Consensus: 3.6%
Previous: 3.85%
Source: Reserve Bank of Australia
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
