The Australian dollar rose in Asian trade on Wednesday against a basket of major rivals, expanding gains for the second straight session against the US dollar and hitting a week high, while approaching five-week highs following strong Australian wages data. 

The data renewed inflationary pressures on the Reserve Bank of Australia’s policymakers, which hurt the odds of a rate cut in May.

The Price

The AUD/USD price rose 0.3% today to $0.6487, the highest in a week, with a session-low at $0.6465.

The Aussie rose 1.55% on Tuesday against the greenback, marking the biggest profit since April 9, and approaching a five-month high at 65.15 cents.

Australian Wages

Earlier Sydney data showed Australian wages rose 3.4% y/y in the first quarter of 2025, compared to the previous quarter’s 3.2% rise, and passing estimates of a 3.2% increase.

On a quarterly basis, the seasonally-adjusted wages grew 0.9% in the first quarter, up from a 0.7% increase in the previous quarter.

Australian Rates

The wages data renewed inflationary pressures on the RBA policymakers before the May 20 meeting.

The RBA held interest rates unchanged at 4.1% at the previous April meeting but opened the door for a May rate cut.

The current odds of such a rate cut by the RBA in May currently stand at 75%.

The recent reduction of global trade tensions led analysts to reduce their expectations for Australian rate cuts this year.

The markets now expect the RBA to cut rates to 3.1% by the end of the year, up from 2.85% in previous forecasts.

Political Developments

Australia is enjoying political stability as the current Prime Minister Anthony Albanese gets sworn in for a second term, maintaining all major government positions unchanged.

Albanese is scheduled to attend Pope Leo XIV’s inauguration in Rome on Sunday, and there he will meet the European Commission President Ursula von der Leyen to discuss trade relations.

Most cryptocurrencies rallied on Tuesday as the risk appetite improved following the US-China trade deal.

Earlier data showed US consumer prices rose 2.3% y/y in April, down from 2.4% in March, and below estimates of 2.4%.

US core prices, excluding food and energy, rose 2.8% in April, same as March and matching estimates.

US consumer prices rose 0.2% m/m in April, below estimates of a 0.3% rise, and compared to March's 0.1% contraction.

The US and China announced a massive cut in reciprocal tariffs for 90 days amid efforts to contain trade tensions and reach a resolution.

According to the temporary agreement, the US will cut tariffs from 145% to 30%, including a 20% tariff related to fentanyl, while China will cut tariffs from 125% to 10%.

In addition, Trump also reduced tariffs on small Chinese packages, worth less than $800, from 120% to 54%.

Ethereum

Ethereum spiked 8.4% as of 21:18 GMT on Coinmarketcap to $2663.5, while rising 49.5% overall in the past seven days.

Oil prices rose on Tuesday and expanded the gains as trade tensions between the US and China cooled, while US inflation slowed down unexpectedly in April.

Oil prices surged 4% yesterday as the US and China agreed to pause most tariffs for 90 days.

Earlier data showed US consumer prices rose 2.3% y/y in April, down from 2.4% in March, and below estimates of 2.4%.

On trading, Brent crude futures due in July rose 2.57%, or $1.67 to $66.63 a barrel.

US crude futures due in June rose 2.78%, or $1.72 to $63.67 a barrel.

The US dollar fell against most major rivals on Tuesday as trade tensions cooled and after important inflation data.

Earlier data showed US consumer prices rose 2.3% y/y in April, down from 2.4% in March, and below estimates of 2.4%.

US core prices, excluding food and energy, rose 2.8% in April, same as March and matching estimates.

US consumer prices rose 0.2% m/m in April, below estimates of a 0.3% rise, and compared to March's 0.1% contraction.

The US and China announced a massive cut in reciprocal tariffs for 90 days amid efforts to contain trade tensions and reach a resolution.

According to the temporary agreement, the US will cut tariffs from 145% to 30%, including a 20% tariff related to fentanyl, while China will cut tariffs from 125% to 10%.

In addition, Trump also reduced tariffs on small Chinese packages, worth less than $800, from 120% to 54%.

Otherwise, the dollar index fell 0.8% as of 20:23 GMT to 101, with a session-high at 101.7, and a low at 100.9.

Aussie

The Australian dollar rose 1.6% as of 21:11 GMT against its US counterpart to $0.6475.

Loonie

The Canadian dollar rose 0.3% against the US dollar as of 21:11 GMT to $0.7175.