Soft sentiment surveys sink Aussie dollar to seven-month low

The Australian dollar dropped about 0.9% on Wednesday, reaching $0.6844, its weakest level in seven months, Business Recorder reported. Weak Australian consumer and business surveys, alongside stronger-than-expected US inflation, contributed to expectations that Australian rates have peaked while US rates could rise further. The Norwegian krone was the only currency among its peers to perform worse overnight.

Australian consumer confidence fell to a four-year low in November, while business conditions stayed negative. Markets see the Reserve Bank of Australia as having completed five rate increases this year and anticipate a 25 basis point reduction by the end of next year. In the United States, October core inflation was 0.3%, prompting traders to consider a small possibility of a 50 basis point hike next month; New Zealand’s dollar held at $0.5605, with markets pricing three 25 basis point increases through 2027.