Date: 26th March 2026.
Rising Bond Yields and a Stronger US Dollar Pressure Gold and the AUD.
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The latest inflationary figures from Australia have put the year’s best performing currency under rare pressure. The Australian Dollar was at times trading more than 7% higher in 2026 alone. This was mainly due to the unwinding of short trades, a hawkish central bank, and strong economic growth. However, the latest inflation figures did not live up to expectations, and the currency is also under pressure from weak Gold prices and a strong US Dollar.
AUDUSD - Week Inflation Pressures the Best Performing Currency of 2026
The Australian Dollar continues to remain the year’s best performing currency even after weakening over the past two-weeks. The currency is currently trading 4.20% higher in 2026 so far, while the US Dollar trades 1.75% higher. The US Dollar is now the second best performing currency due to the bullish trend since the start of the US-Iran conflict.
The AUDUSD has been in a downward trend since March 11th. Though within this period, the Australian Dollar has continued to show signs of strength despite the trend. However, the trend saw a relatively one-sided trend on Wednesday due to the inflation figures.
Analysts had been expecting Australia’s inflation rate to remain at 3.8% and for inflation to rise by 0.1% on a monthly basis. However, no inflation was recorded for February and the inflation rate fell from 3.8% to 3.7%. Nevertheless, the inflation figures do not take into consideration the conflict and supply chain disruptions from the past few weeks. For this reason, analysts continue to believe the Reserve Bank of Australia will remain on a hawkish path.
For this reason, investors continue to believe that inflation will rise, as will interest rates. This is likely to support the Australian Dollar even though it may see stronger resistance against the US Dollar. The EURAUD and AUDJPY may see a more one-sided trend.
Furthermore, Ursula von der Leyen and Anthony Albanese announced that the EU and Australia had completed negotiations on a free trade agreement. This means many goods traded between them will become cheaper and easier to sell, as import taxes will be reduced or removed. This could also support the Australian Dollar. Australia will remove tariffs on many European goods such as wine, fruit and vegetables, chocolate, sugar, and other processed foods. The EU will also reduce or remove import barriers on many Australian goods, including wine, nuts, fruit, honey, some dairy products, and seafood, while allowing larger amounts of Australian beef, sugar, and rice to enter at lower tariffs.
HFM AUDUSD 1-Hour Chart
In terms of technical analysis, the price maintains indications of a downward trend for the short to medium term, but with strong spikes upwards. The average spike against the US Dollar in recent weeks measures 1.85%. The price remains below the moving average of the 2-hour chart and in the negative area of the RSI. However, on a 5-minute chart, the price holds a neutral indication while the exchange rate is relatively close to a key support area.
If the AUDUSD’s price rises above 0.69522, buy signals are likely to materialise. Whereas, a price below 0.69395 will see sell signals strengthen.
XAUUSD - Bond Yields and the Dollar Pressure Gold Prices!
The World Gold Council said Gold is falling mainly because US government bond yields are rising. Economists also advise the stronger US Dollar and Gold reserve sales from the Middle East are also significantly pressuring Gold. When bond yields go up, gold often becomes less attractive to investors because gold does not pay interest. Right now, the 10-year US Treasury yield has risen to around 4.4%, and this has put pressure on gold prices. This reflects the usual pattern where gold and bond yields often move in opposite directions.
At the same time, the Council said geopolitical tensions still matter a lot. If tensions in the Middle East ease, such as safer shipping through the Strait of Hormuz or progress in US-Iran talks, the balance in the market could change. Investors have also not fully abandoned precious metals, as silver and gold positioning remains relatively stable. Trading activity has increased compared with last week, which shows that interest in the market is still active, even though gold remains under pressure.
The asset is currently witnessing a bearish bias due to the recent bearish momentum. In order for technical analysis and indicators to start pointing towards a potential uptrend, the price will need to rise above $4,536.65 for a stronger signal or $4,469.86 for a short-term bullish signal.
HFM XAUUSD 1-Hour Chart
Key Takeaways:
* The Australian Dollar remains 2026’s best-performing currency, but recent pressure has weakened its momentum.
* Softer-than-expected Australian inflation data triggered the latest decline in the Australian Dollar.
* Markets still expect the Reserve Bank of Australia to remain hawkish, which may support the currency.
* A stronger US Dollar and weaker Gold prices are creating added pressure on the Australian Dollar.
* Gold remains under pressure from rising US bond yields and the stronger US Dollar.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi
HFMarkets
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