The Australian dollar climbed above $0.65, nearing one-week highs, after Reserve Bank of Australia Deputy Governor Andrew Hauser noted that monetary policy faces an unusual challenge and emphasized the need to keep policy tight to contain inflation. Hauser added that demand was “slightly” above potential when GDP growth accelerated last year, marking the tightest recovery since the early 1980s and leaving little room for expansion without reigniting inflation. Earlier this month, the RBA held its policy rate at 3.6% amid persistent underlying price pressures. Markets largely expect one more rate cut, likely by May next year, though some analysts warn the easing cycle may already be over. The Aussie was also supported by improved risk sentiment on hopes for an end to the record-long US government shutdown and easing US-China trade tensions.
