Australian Dollar outperforms its peers as hawkish RBA bets swell further

Australian Dollar Price Today

The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the New Zealand Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.36%	0.21%	0.17%	0.07%	0.05%	0.46%	0.29%
EUR	-0.36%		-0.15%	-0.18%	-0.31%	-0.32%	0.10%	-0.10%
GBP	-0.21%	0.15%		-0.04%	-0.14%	-0.15%	0.28%	0.08%
JPY	-0.17%	0.18%	0.04%		-0.09%	-0.12%	0.27%	0.13%
CAD	-0.07%	0.31%	0.14%	0.09%		-0.02%	0.40%	0.21%
AUD	-0.05%	0.32%	0.15%	0.12%	0.02%		0.43%	0.23%
NZD	-0.46%	-0.10%	-0.28%	-0.27%	-0.40%	-0.43%		-0.19%
CHF	-0.29%	0.10%	-0.08%	-0.13%	-0.21%	-0.23%	0.19%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

Markets still imply around a 20% chance of a June hike to the 4.35% cash rate, but the probability of an August hike to 4.60% nudged further above 80%, according to a Reuters report.

In the 2026 budget, Australian Treasurer Jim Chalmers lowered tax rate for citizens having income between $18,201 and $45,000 to 15% from July 2026, a move that will leave general public with higher purchasing power and boosts inflation expectations in an already high-inflation economy.

Meanwhile, investors await the meeting between United States (US) President Donald Trump and Chinese leader Xi Jinping during Trump’s visit to Beijing on May 13-15. Given that the Australian economy relies meaningfully on its exports to Beijing, the outcome of the Trump-Xi meeting will have a significant impact on the Australian Dollar.

During the day, the US Dollar also trades firmly due to increased expectations of at least one interest rate hike by the Federal Reserve (Fed) this year. As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.3% higher to near 98.58, the highest level so far this month.

RBA FAQs

What is the Reserve Bank of Australia and how does it influence the Australian Dollar?

The Reserve Bank of Australia (RBA) sets interest rates and manages monetary policy for Australia. Decisions are made by a board of governors at 11 meetings a year and ad hoc emergency meetings as required. The RBA’s primary mandate is to maintain price stability, which means an inflation rate of 2-3%, but also “..to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people.” Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will strengthen the Australian Dollar (AUD) and vice versa. Other RBA tools include quantitative easing and tightening.

How does inflation data impact the value of the Australian Dollar?

While inflation had always traditionally been thought of as a negative factor for currencies since it lowers the value of money in general, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Moderately higher inflation now tends to lead central banks to put up their interest rates, which in turn has the effect of attracting more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in the case of Australia is the Aussie Dollar.

How does economic data influence the value of the Australian Dollar?

Macroeconomic data gauges the health of an economy and can have an impact on the value of its currency. Investors prefer to invest their capital in economies that are safe and growing rather than precarious and shrinking. Greater capital inflows increase the aggregate demand and value of the domestic currency. Classic indicators, such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can influence AUD. A strong economy may encourage the Reserve Bank of Australia to put up interest rates, also supporting AUD.

What is Quantitative Easing (QE) and how does it affect the Australian Dollar?

Quantitative Easing (QE) is a tool used in extreme situations when lowering interest rates is not enough to restore the flow of credit in the economy. QE is the process by which the Reserve Bank of Australia (RBA) prints Australian Dollars (AUD) for the purpose of buying assets – usually government or corporate bonds – from financial institutions, thereby providing them with much-needed liquidity. QE usually results in a weaker AUD.

What is Quantitative tightening (QT) and how does it affect the Australian Dollar?

Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Reserve Bank of Australia (RBA) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the RBA stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It would be positive (or bullish) for the Australian Dollar.