AUD Weekly Overview: Testing Key Levels
Updated 28 Jul 2026 • 23:45 GMT
The Australian Dollar (AUD) is currently testing the critical 0.7000 level against the USD, following a recent upswing fueled by high interest-rate differentials and strong commodity prices. Despite the recent rally and constructive technical setup above the 200-day SMA, the future trajectory of the AUD will be heavily influenced by developments in the US, including any changes in interest-rate expectations and geopolitical risks. The Reserve Bank of Australia's input, with events such as the upcoming CPI report, will also be pivotal in shaping market expectations.
Key watchpoints
- Technical Thresholds: Monitor if AUD/USD can sustain a breakout above 0.7000, which may lead to further upside driven by short-covering.
- Central Bank Signals: Keep an eye on RBA's communications and economic data releases, particularly the CPI, for cues on monetary policy direction.
- Global Influences: US interest-rate decisions and geopolitical developments, particularly related to energy prices, could significantly impact AUD movements.
31 March 2026
1. Rupee Depreciation Amid Middle East Conflict
The Sri Lankan rupee has depreciated by approximately 1.3% in 2026, with pressures intensifying following the Middle East conflict. By 25 March 2026, the exchange rate reached around Rs. 314.2 per US dollar. (english.newsfirst.lk)
2. Central Bank's Foreign Exchange Purchases
The Central Bank of Sri Lanka (CBSL) has been actively purchasing foreign exchange, with net purchases totaling $700 million in the first two months of 2026. This strategy aims to bolster the country's foreign reserves. (ft.lk)
3. IMF Emergency Financial Support
In December 2025, the International Monetary Fund (IMF) approved emergency financing of approximately $206 million for Sri Lanka under the Rapid Financing Instrument. This support is intended to address urgent balance-of-payments and fiscal pressures resulting from Cyclone Ditwah. (imf.org)
4. Policy Rate Unchanged Amid Economic Growth
The CBSL maintained the Overnight Policy Rate at 7.75% in January 2026, citing firm economic growth and inflation moving towards the 5% target. Inflation remained at 2.1% in December 2025, with expectations of gradual increase by late 2026. (fibre2fashion.com)
These developments highlight the dynamic factors influencing the Sri Lankan rupee's performance in 2026.