The Australian dollar rose in the Asian market on Friday against a basket of global currencies, extending gains for the third consecutive day against its US counterpart, recording its highest level in ten months, and heading toward its biggest weekly gain since last April.

This strong weekly gain is supported by the rise in global commodity and base metal prices, in addition to renewed inflationary pressures on policymakers at the Reserve Bank of Australia, which has led to reduced expectations of an Australian interest rate cut in September.

Price Overview

• Today’s exchange rate of the Australian dollar: The Australian dollar rose against its US counterpart by about 0.15% to 0.6669, the highest since November 2024, from the opening price of 0.6659, and recorded the lowest level at 0.6656.

• On Thursday, the Australian dollar recorded a rise of 0.75% against the US dollar, its second consecutive daily gain, following the release of moderate inflation data in the United States.

Weekly Trading

Throughout this week’s trading, which officially ends with today’s settlement, the Australian dollar is up so far by about 1.75% against the US dollar, on the verge of achieving a third consecutive weekly gain and the biggest weekly gain since last April.

Global Commodity Prices

Global commodity and metal prices have recently witnessed a strong wave of increases, driven by rising demand from major economies, primarily China and the United States, along with geopolitical tensions that have boosted investor appetite for basic commodities as a safe haven.

This rise has a positive impact on the Australian economy, which is one of the largest exporters of iron ore, coal, and gold, as it helps strengthen the trade surplus and increase revenues for companies operating in the mining sector.

It also provides strong support for the government budget through higher revenues from fees and taxes, giving the Australian economy greater resilience in facing global inflationary pressures and maintaining stable growth rates.

Australian Interest Rates

• Recent data released in Sydney showed inflation in the country rising to its highest level in a year, renewing inflationary pressures on policymakers at the Reserve Bank of Australia.

• Following the inflation data, the pricing of the likelihood of the Reserve Bank of Australia cutting interest rates by 25 basis points in September dropped from 30% to 22%.

• To reprice these expectations, investors are awaiting more data on inflation, unemployment, and wages in Australia before the upcoming September 30 meeting.

Most cryptocurrencies rose during trading on Thursday amid a rebound in risk appetite as bets increased on the Federal Reserve cutting interest rates this month, despite the release of disappointing economic data today.

Government data released today in the United States showed that the consumer price index rose by 0.4% in August, exceeding expectations of 0.3%, while the annual reading came in at 2.9%, in line with forecasts.

Excluding some volatile items such as energy and food, the core consumer price index rose by 0.3% on a monthly basis and by 3.1% on an annual basis, with both readings matching expectations.

This comes after producer price index data showed an unexpected monthly decline of 0.1% and a 2.6% increase year-on-year.

Meanwhile, other data revealed that the number of weekly jobless claims rose by 27,000 in the past week to 263,000, surpassing expectations of 235,000.

Despite this data, market expectations still point to the Federal Reserve cutting interest rates by 25 basis points at the meeting scheduled for September 17, according to the CME FedWatch tool, while bets on a larger 50 basis point cut edged slightly higher.

Ethereum

In trading, the price of Ethereum rose by 2.1% to $4,423.1 at 21:24 GMT on CoinMarketCap.

Ripple

The price of Ripple rose by 1.3% to $3.02 at 21:24 GMT on CoinMarketCap.

Gold prices fell during trading on Thursday following the release of economic data that did not dissuade markets from speculating that the Federal Reserve is close to cutting interest rates.

Government data released today in the United States showed that the consumer price index rose by 0.4% in August, exceeding expectations of 0.3%, while the annual reading came in at 2.9%, in line with forecasts.

Excluding some volatile items such as energy and food, the core consumer price index rose by 0.3% on a monthly basis and by 3.1% on an annual basis, with both readings matching expectations.

This comes after producer price index data showed an unexpected monthly decline of 0.1% and a 2.6% increase year-on-year.

Meanwhile, other data revealed that the number of weekly jobless claims rose by 27,000 in the past week to 263,000, surpassing expectations of 235,000.

Despite this data, market expectations still point to the Federal Reserve cutting interest rates by 25 basis points at the meeting scheduled for September 17, according to the CME FedWatch tool, while bets on a larger 50 basis point cut edged slightly higher.

On the other hand, the dollar index fell by 0.2% to 97.5 points as of 20:54 GMT, after recording a high of 98.09 points and a low of 97.4 points.

In terms of trading, spot gold contracts declined by 0.2% to $3,674.7 per ounce as of 20:54 GMT.

The world faces an escalating energy dilemma known as the “energy trilemma.” Its three sides are: sustainability (clean energy), accessibility (energy security), and affordability (equity). Achieving a balance among these three objectives is extremely difficult even under the best circumstances, but it becomes far more complex on the global level given the huge diversity in energy systems, constraints, and contexts across regions and countries around the world.

This is a global issue that concerns Europe as much as it does sub-Saharan Africa. Some countries are rich in cheap and abundant fossil fuels but struggle to achieve carbon reduction targets. On the other hand, other countries possess extensive clean energy systems but face crises related to citizens’ ability to afford costs. Reaching a comprehensive solution to this global dilemma requires unprecedented international cooperation, in addition to exceptional sensitivity to regional differences in energy realities, opportunities, and challenges.

To contribute to addressing this dilemma at the level of international policies and programs, the World Economic Forum’s Global Future Council on the Future of Energy Technologies is working on building a framework to understand the fundamental factors and stakeholders necessary to provide an enabling environment for a safer, fairer, and more sustainable energy future. And as part of this project, the initiative identified three main factors that lie at the core of the complexities of energy systems, and must be “understood and addressed together for innovation to succeed”:

- Dependence on physical ecosystems (that is, energy demand, supplies, transmission and distribution networks)

- Political, geopolitical, and regulatory challenges (at both national and international levels, including commitments and obligations)

- High risk levels with strong aversion to risk

Physical dependencies represent a major obstacle to innovation in both rich and poor countries alike. In the United States, for example, a lack of grid connections and transmission infrastructure has led to years-long delays for new solar power plants to enter service. In Africa, leaders face a historic challenge represented in “leapfrogging” directly to large-scale clean energy projects at the utility level, bypassing traditional electrification phases, in order to provide electricity to 600 million Africans who still live without it.

As for political and regulatory challenges, they are global in scope and complex even at smaller local levels. Leaders have to deal with local realities and their needs, global supply chains, and compliance with laws and commitments entrenched at multiple and overlapping levels — and often contradictory. Journalists have reported for years that a “maze of bureaucracy” hinders new energy projects from the United States to the European Union. One prominent example is the TransWest Express project in the United States, which took 18 years to obtain approval due to overlapping federal and state bureaucratic obstacles, and is still not expected to enter service before 2030.

And finally, our world’s excessive dependence on energy imposes the highest priority on short-term energy security, even if that comes at the expense of future generations’ ability to enjoy the same necessities and comforts that depend on electricity. Time and again, countries choose immediate grid stability at the expense of decarbonization and long-term stability. What alternative do they have?

According to the World Economic Forum report:

“There is no appetite for taking on operational risk in this sector; this is reflected in most regulations and certainly represents a barrier to innovation. The sector has traditionally been one of the slowest adopters of new technologies.”

But to overcome the paralysis imposed by this “decision tree” that consistently sidelines the future, innovation becomes imperative. Despite Malthusian fears of resource depletion and rising demand, technology and innovations have previously succeeded in overcoming scarcity expectations — and they can do so again.

And although the energy sector is by nature slow to adapt, artificial intelligence is reshaping global energy systems at present. And although its integration represents a major threat to energy systems in the short term due to heavy consumption, experts confirm that it will soon contribute to offsetting its consumption by making the entire world more efficient in energy use.

And the Forum’s report concludes by saying:

“There is a need for new solutions to manage risk, address the energy trilemma, and modernize the system. However, success depends on creating a tailored energy innovation ecosystem that recognizes these unique complexities and operates according to its own rules.”