AUD/USD trades under 0.70 after a dovish RBA rate hike and softer iron ore, with the 200‑day moving average around 0.7050‑0.7080 acting as key resistance.

The Australian dollar continued to drift lower on Tuesday, slipping below the 0.70 mark after the Reserve Bank of Australia (RBA) delivered its fifth 25‑basis‑point hike of the cycle. While the move raised the cash‑rate target to 4.85%, the accompanying statement was notably dovish, omitting any forward‑looking language about further tightening and flagging inflation risks above 3% for the year ahead. The split 6‑3 vote and a projection of a 4.9% peak by June 2027 suggest the hike could be the final one in the current tightening round.

Industrial metals drive the pair

Societe Generale analysts, led by Kenneth Broux, argue that AUD/USD is now more a function of industrial‑metal prices than the RBA‑Fed spread. Iron‑ore futures on the SGX have retreated to roughly $90 per metric ton, down from a May peak near $108, stripping away a key source of support for the Aussie currency. With the 200‑day moving average hovering between 0.7050 and 0.7080, the level that held the pair earlier in 2026 has flipped into resistance, demanding a decisive break for bullish sentiment to re‑emerge.

Heavy short positioning

Positioning data shows short exposure to the Australian dollar has risen to 39.5% of open interest, the most bearish reading since February 2025. The combination of fading fundamental tailwinds, weaker metal prices and reduced expectations of further RBA tightening has left the market heavily skewed against the AUD.

What traders are watching

• A break above the 0.7080 resistance could signal a short‑covering rally
• A sustained fall below 0.6950 would reinforce the bearish bias
• Further movements in iron‑ore prices and any fresh RBA commentary

Related news

• US midterm elections raise dollar liquidity risks, says Danske Bank
• Euro edges up against US dollar ahead of US midterm elections
• Rba hikes cash rate to 4.85%, highest since 2008
• Half of office workers feel remote, NY Fed survey shows

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This article is compiled from international market news for information only. It is not investment advice.