The Australian dollar rose against most major currencies during Tuesday’s trading after a widely expected decision from the central bank regarding monetary policy.

The Reserve Bank of Australia (RBA) on Tuesday kept the benchmark interest rate at 3.6%, in line with expectations, at a time when inflation continues to rise, recording its highest level in more than a year.

The decision came in line with the expectations of economists polled by Reuters, after data earlier in September showed an annual inflation rate of 3% in August, the highest since July 2024, driven by rising housing, food, and alcohol prices.

The bank indicated in its statement the persistence of inflationary concerns: “The recent data, although partial and volatile, indicate that inflation in the third quarter may be higher than expected in the August monetary policy statement.”

It added that private domestic demand is recovering, while there are indications that inflation may persist in some sectors.

The bank had lowered interest rates by 75 basis points since the beginning of the year, after keeping them stable at 4.35% since November 2023 as part of its efforts to contain inflation.

The bank confirmed that the economic outlook remains unclear amid local and international developments: “The stronger-than-expected data on growth and inflation may indicate that households have become more comfortable with spending, but this consumption growth may not continue, especially if concerns about external developments increase.”

For her part, Governor Michele Bullock said earlier this month before parliament: “The global environment is characterized by a high degree of uncertainty and unpredictability, but monetary policy is well placed to respond if it appears that international developments could have a material impact on the Australian economy.”

In a note issued after the decision, Harry Murphy Cruise, head of economic and global trade research at Oxford Economics, said the bank “has effectively succeeded in its battle against inflation.”

He expected core inflation (the trimmed mean measure) to decline to 2.6% in the third quarter of 2025, paving the way for a new cut in November. The Reserve Bank of Australia targets an inflation range of 2% to 3%.

He also added that an additional cut may occur in the first quarter of 2026, as core inflation approaches the middle of the target range, but with an expected rise in the unemployment rate, which may require additional monetary support.

On the growth front, the Australian economy exceeded expectations in the second quarter, recording the fastest pace of expansion since September 2023, giving the bank room to keep interest rates focused on containing inflation.

GDP rose by 1.8% year-on-year, compared with expectations of 1.6% in a Reuters poll, and up from 1.3% in the previous quarter. On a quarterly basis, the economy grew by 0.6%, exceeding expectations of 0.5%.

Data from the Australian Bureau of Statistics showed that growth was driven by domestic spending, including household and government spending.

In trading, the Australian dollar rose against its US counterpart at 19:43 GMT by 0.6% to 0.6617.

Canadian dollar

The Canadian dollar stabilized against its US counterpart at 19:43 GMT at 0.7185.

US dollar

The US dollar index fell at 19:33 GMT by 0.1% to 97.8 points, recording a high of 98.05 points and a low of 97.6 points.

Negotiations are still ongoing between the White House and Congress to prevent a federal government shutdown, which will of course negatively affect the economy and markets.

House Speaker Mike Johnson said he doubted the possibility of reaching an agreement before the end of the day to avoid a shutdown, while Vice President JD Vance said the government is on track to shut down after a failed meeting between Donald Trump and party leaders.

Government data released today showed that job vacancies in the US stabilized at 7.2 million in August, compared with expectations of a decline to 7.19 million.

Data released by the Conference Board today showed that US consumer confidence fell to 94.2 points in September, the lowest since April, compared with 97.8 points in August.

The history of energy in the industrial era has been tied to resource access — first coal, then oil and gas. Today, that story is evolving. The next chapter is not about drilling fields but mastering batteries and storage systems that can turn renewable energy into reliable electricity.

Solar and wind are now the fastest-growing sources of power worldwide, but their inherent weakness lies in intermittency: the sun doesn’t always shine, and the wind doesn’t always blow. Without storage, renewable-heavy grids are vulnerable to volatility, outages, and wasted assets. That’s why storage has become central to the clean energy puzzle — and why a new global race is in full swing.

Lithium-Ion Dominance — and Its Limits

Lithium-ion batteries have led the storage revolution so far, dominating everything from home units to grid-scale projects, thanks to falling costs and rapid deployment. According to BloombergNEF, global battery storage capacity doubled in 2023, driven mostly by lithium-ion, with companies like Tesla, LG Energy Solution, and China’s CATL at the forefront.

Yet lithium-ion is not the final answer. It struggles with ultra-long-duration storage — days or weeks at a time. Its supply chain depends heavily on lithium, cobalt, and nickel, raising geopolitical and price risks. Safety remains a concern due to fire hazards, and recycling is still challenging. In short, lithium-ion is indispensable but not sufficient.

The Next Generation of Storage Technologies

The race is on to develop solutions that go beyond lithium-ion — longer-lasting, safer, and cheaper:

Flow batteries: Store energy in liquid electrolytes within external tanks, ideal for long-duration discharge. Invinity Energy Systems and ESS Tech are pioneering vanadium flow batteries with decades-long lifespans.

Gravity storage: Energy Vault and Gravitricity are testing ways to lift and release massive weights to generate power. Though early-stage, such projects attract heavy investment as potential long-duration solutions.

Thermal storage: Startups like Kraftblock store energy as heat in materials like sand or molten salt, serving both industry and homes. On a utility scale, Copenhagen Infrastructure Partners is backing thermal storage tied to renewables in Europe.

Sodium-ion batteries: Safer and cheaper than lithium, sodium is abundant. CATL has launched a commercial sodium-ion cell. While unsuitable for EVs due to lower energy density, it may fit stationary storage. Still, risks are real: US-based Natron Energy, once a leader, liquidated this year after failing certification, despite large customer orders.

Investment and Policy Landscape

Energy storage is no longer niche. Wood Mackenzie projects the global market will grow tenfold by 2030, drawing hundreds of billions in capital.

Governments are accelerating the race. In the US, the Inflation Reduction Act provides tax credits for storage and domestic manufacturing. Europe is rolling out similar incentives, while China remains the world’s largest backer of both lithium-ion and emerging technologies.

Geopolitics are deeply entwined. Just as oil was shaped by drilling rights and shipping lanes, the storage era will be defined by control of mineral supply chains, manufacturing capacity, and intellectual property. The US is racing to catch up with China’s dominance in battery supply chains.

The Grid of the Future

The outcome will not be a single technology replacing another, but a hybrid system. Lithium-ion will continue to dominate short-duration storage, while flow batteries, thermal systems, and gravity-based designs find niches in long-duration applications. Sodium-ion could become a safe, low-cost middle ground for stationary storage.

The stakes are high. Storage is not just an enabler of renewables — it’s a matter of energy security. Nations that balance their grids without relying on imported fuels gain resilience. For investors, the returns lie in betting on technologies and firms that can scale economically while leveraging policy support and managing supply chain risks.

Energy storage is the battlefield where the future of clean power will be decided. The question is no longer who controls the oil wells or gas pipelines, but who masters the technologies that keep the lights on when the sun sets and the wind dies down.

Most US stock indexes fell during Tuesday’s trading amid concerns over a potential government shutdown, though Wall Street remains on track for strong gains this month.

Negotiations are still ongoing between the White House and Congress to prevent a federal shutdown, which would inevitably weigh on the economy and markets.

House Speaker Mike Johnson said he doubted an agreement could be reached before the end of the day to avert the shutdown, while Vice President J.D. Vance stated that the government is on course to shut down following a failed meeting between Donald Trump and bipartisan leaders.

As for trading, the Dow Jones Industrial Average fell 0.3% (127 points) to 46,188 points as of 15:57 GMT. The broader S&P 500 Index slipped less than 0.1% (5 points) to 6,656 points, while the Nasdaq Composite inched up less than 0.1% (5 points) to 22,592 points.

Palladium prices declined during Tuesday’s trading despite the dollar weakening against most major currencies, as concerns over demand continued to weigh on the market.

This comes amid the continued release of weak economic data from China earlier this month. August figures showed that industrial production, retail sales, and fixed asset investment all grew below expectations. Meanwhile, the unemployment rate unexpectedly rose to 5.3%.

These data followed weak inflation figures from China, which confirmed the persistence of disinflationary pressures in the world’s second-largest economy, raising concerns over Chinese demand.

Separately, the ongoing Russia-Ukraine war continues to cast a shadow over various markets, especially metals, as Moscow remains one of the world’s largest palladium producers.

US President Donald Trump admitted today that ending the Russia-Ukraine war is difficult under current conditions, adding that he was disappointed with President Vladimir Putin.

On the other hand, the US dollar index fell by 0.2% to 97.7 points as of 15:40 GMT, after recording a high of 98.05 points and a low of 97.6 points.

In terms of trading, palladium futures for December delivery fell by 0.6% to $1,283.5 an ounce as of 15:41 GMT.