Wednesday, October 8, 2025 - The Australian dollar weakened to around US$0.656, extending its decline as the US dollar continued to strengthen. Safe-haven demand for the greenback increased as the US government shutdown entered its second week, while President Trump's threat of mass layoffs further diminished hopes for a resolution. Global risk sentiment also declined, pressuring high-beta currencies like the Aussie.

On the policy front, markets reduced expectations for near-term RBA easing after last week's hawkish tone. Futures prices now price in a 35% chance of a 25 bps cut in November and a 56% chance of December, making the third-quarter CPI the next crucial release. At the same time, the Aussie received support from a rally in gold—the government projects the yellow metal will become Australia's second-most valuable export—reaffirming the country's position as a major producer and exporter, although it has not yet been able to stem the weakening exchange rate.

Source: Newsmaker.id