The Australian dollar remained below $0.70, hovering close to three-month lows as a resurgent US dollar continued to dominate currency markets, while the domestic policy outlook remained mixed.
Minutes from the Reserve Bank of Australia's June policy meeting showed policymakers continued to see upside risks to inflation and remained prepared to raise interest rates again if needed, having already delivered three rate hikes this year.
Despite the hawkish tone, easing oil prices since the meeting have tempered expectations for additional tightening, with markets now assigning just a 15% probability of a rate hike at the August meeting.
They also see a 60% chance that the current 4.35% cash rate marks the peak of the tightening cycle, with the first rate cut not expected until late 2027.
Meanwhile, the greenback remained broadly firm as strong US economic data underscored the economy’s resilience and reinforced expectations that the Federal Reserve will raise interest rates this year.