The Australian dollar weakened to around $0.652 on Wednesday, giving up gains from the previous session after a dovish rate cut by the Reserve Bank of Australia continued to pressure the currency. On Tuesday, the central bank cut its official cash rate as widely expected and signaled that further easing may be needed to achieve its inflation and employment goals amid a loss of economic momentum. It also downgraded its 2025 GDP forecast to 1.7% from 2.1%, pointing to subdued public demand early in the year that is unlikely to recover. Markets now imply only a 34% chance of another cut in September, though markets have fully priced in two additional cuts by early 2026, bringing the rate to around 3.1%. Meanwhile, a softer greenback amid mounting Fed rate cut bets in September, limited declines for the AUD. The commodity-linked Aussie also found support from higher iron ore prices, as the extension of the US-China trade truce boosted demand for Australia’s resource-rich exports.