31.03.202603:17:23UTC+00Aussie Dollar Heads for Monthly Drop

The Australian dollar hovered around $0.686 on Tuesday, trading near a two‑month low and heading for a decline of about 3.6% in March—its weakest monthly performance since December 2024. The currency had been relatively resilient for most of the month, supported by higher interest rates, but has come under pressure in recent sessions as market worries have shifted from inflation to global growth.

Minutes from the Reserve Bank of Australia’s March meeting underscored uncertainty over the future path of interest rates following two hikes earlier this year, reflecting heightened concern over the conflict in the Middle East. The board noted the need to weigh the potentially significant impact of a prolonged war on both inflation and economic activity.

Money markets now price in roughly a 60% probability of another rate increase in May, along with about 65 basis points of additional tightening over the course of the year. Before the RBA’s next policy decision, investors will be watching several key releases in April—first‑quarter inflation, labor market data, and monthly consumer spending figures—which are expected to be pivotal in shaping the bank’s next move.