The Australian dollar climbed above $0.65 on Monday, marking its highest level in six months as investors moved away from the US dollar. The greenback weakened amid growing uncertainty surrounding President Donald Trump’s unpredictable trade policies, driving demand for alternative currencies.

Investor sentiment took a hit after President Trump abruptly threatened a 50% tariff on imports from the European Union, only to backtrack and delay the implementation days later. Adding to market jitters, Trump floated the idea of a 25% tariff on iPhones not manufactured in the United States, further raising concerns over economic stability and policy direction.

The shifting trade rhetoric has put pressure on the US dollar, creating room for currencies like the Australian dollar to gain ground. Risk-sensitive currencies tend to benefit when the US dollar loses favor, especially during periods of heightened global trade uncertainty.

Back home, Australian investors are now focused on upcoming inflation data, which will be a key factor in determining the Reserve Bank of Australia’s (RBA) next policy moves. The data will provide insight into whether the central bank may maintain or shift its dovish monetary stance.

Last week, the RBA cut its cash rate to 3.85% as widely expected, citing increased downside risks to growth and softening inflationary pressures. Market participants now await further signals to gauge the central bank’s direction in the months ahead.