The Australian dollar fell to around $0.646 on Tuesday, as mounting expectations of an interest rate cut dampened market sentiment. The Reserve Bank of Australia is widely anticipated to lower the cash rate to 3.60% at its upcoming two-day policy meeting ending on August 12, citing a slowdown in core inflation - the RBA’s preferred gauge - which eased to 2.7% in June, comfortably within the central bank’s 2–3% target range. Markets have now priced in a nearly 95% probability that the RBA will ease rates and are anticipating two more reductions by early next year. On the economic front, the ANZ-Indeed Australian Job Ads index recorded its sharpest monthly drop since February in July 2025, marking the fourth decline so far this year and signaling a gradual cooling in labor market conditions. Meanwhile, the Composite PMI surged to its highest level since April 2022, supported by stronger performance in the services sector and a return to growth in manufacturing activity.