The Australian dollar depreciated past $0.65 on Monday, extending losses from the previous week, as market sentiment remained subdued ahead of this week's release of the RBA meeting minutes and a speech by Governor Michele Bullock.

This followed the RBA's unexpected decision to leave its benchmark interest rate unchanged at 3.85%, contrary to widespread expectations of a 25 bps cut.

Nevertheless, economists anticipate a gradual shift toward monetary easing later this year, with current forecasts indicating that the cash rate could decline to around 3.1% by early 2026, supported by a stable labor market and cautiously improving economic growth prospects.

Meanwhile, investors continued to grapple with concerns over evolving US trade policies, as Australia weighed the impact of potential US tariffs of up to 200% on pharmaceutical goods. While affirming its commitment to fair trade, the Australian government reiterated that it will not negotiate on its existing drug subsidy policies.

Source: Trading Economics