18.12.202503:13:47UTC+00Australian Dollar Hits Two-Week Low

The Australian dollar slipped below $0.660 on Thursday, marking its sixth consecutive session of declines, reaching a two-week low. This decline was triggered by a widespread risk-averse sentiment that swept across financial markets, putting pressure on the currency. The Australian dollar, often regarded as a barometer of global risk, has recently shown strong correlation with Wall Street's movements. This connection became evident as a global sell-off in equities occurred, fueled by renewed selling in the technology sector. Investors are concerned about companies increasing their debt levels to finance developments in artificial intelligence. Despite these concerns, market participants are still anticipating at least one interest rate hike by the Reserve Bank of Australia in the coming year. There is a 25% likelihood of a rate increase in February, which rises to 40% in March and reaches 70% by May. Moreover, the Australian government's significant upward revision of its inflation outlook on Wednesday has reinforced the central bank's hawkish stance. Attention now turns to the release of the RBA’s December meeting minutes next week, which are expected to shed light on the board's inflation concerns and potential future tightening measures.