Analysis: The Australian dollar regains lost ground from interest rate cuts, highlighting the low point of the US dollar.

The Australian dollar/US dollar rebounded strongly on Wednesday, reclaiming the lost ground from the previous day's unexpected rate cut by the Australian central bank. This reversal once again indicates how strong investors' expectations are for the continued - even accelerated - decline of the US dollar this year. Of particular note is that the US dollar fell today in the face of rising US bond yields. While Australian bond yields have fallen below US yields, the Australian dollar remains resilient. This also highlights a concern raised by the Australian central bank, that President Trump's tariff policies unexpectedly weaken rather than boost the US dollar. In its monetary policy statement yesterday, the Reserve Bank of Australia indicated that if this trend continues, it could weaken the Australian dollar's "buffering effect". Typically, during periods of heightened risk aversion, the Australian dollar/US dollar exchange rate would fall, helping to ease Australia's financial environment.