The Australian dollar edged higher to around $0.709 on Monday, moving toward three-year highs, as the US dollar weakened amid fresh tariff concerns. Over the weekend, President Donald Trump announced that global tariffs would rise from 10% to 15%, after the Supreme Court struck down a large portion of his earlier trade measures. Australia’s Trade Minister Don Farrell said the country is actively reviewing its options, coordinating with the embassy in Washington to evaluate potential impacts while reaffirming the nation’s commitment to free and fair trade. Meanwhile, the likelihood of a March rate hike is rising, following firmer domestic data and more hawkish signals from policymakers. Markets currently assign a 76% probability that the Reserve Bank will lift its cash rate by May, while the odds of a move as early as March have climbed to about 28%. Key data releases, including January’s monthly CPI and Q4 GDP, will be closely watched for signs that could prompt the RBA to move sooner.
