• Australian Dollar gains ground amid cautious sentiment surrounding the RBA policy stance.
  • The People’s Bank of China left one- and five-year Loan Prime Rates unchanged at 3.00% and 3.50%, respectively.
  • Fed’s Hammack said policy is well-positioned to pause and assess the impact of 75-basis-point rate cuts.

The Australian Dollar (AUD) holds gains against the US Dollar (USD) on Monday after the People’s Bank of China (PBOC), China's central bank, announced to leave its Loan Prime Rates (LPRs) unchanged. The one- and five-year LPRs were at 3.00% and 3.50%, respectively.

Traders will likely focus on the Reserve Bank of Australia’s (RBA) Meeting Minutes due on Tuesday, for clues on the central bank’s policy outlook and its assessment of inflationary pressures. As of December 18, the ASX 30-Day Interbank Cash Rate Futures February 2026 contract was trading at 96.34, implying a 27% probability of a rate increase to 3.85% at the next RBA Board meeting.

US Dollar breaks three-day winning streak despite cautious Fedspeak

  • The US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, is losing ground and trading around 98.60 at the time of writing. Traders await the US Gross Domestic Product Annualized for the third quarter due on Tuesday.
  • Federal Reserve Bank of Cleveland President Beth Hammack said on Sunday that monetary policy is in a good place to pause and assess the effects of 75-basis-point (bps) rate cuts on the economy during the first quarter, per Bloomberg.
  • The Summary of Economic Projections, or so-called "dot plot," indicated a median expectation of only one additional rate cut in 2026. The CME FedWatch tool shows a 79.0% probability of rates being held at the Fed’s January meeting, up from 75.6% a week earlier. Meanwhile, the likelihood of a 25-basis-point rate cut has fallen to 21.0% from 24.4% a week ago.
  • The US Bureau of Labor Statistics (BLS) released on Thursday that the US Consumer Price Index (CPI) eased to 2.7% in November. This reading came in below the market consensus of 3.1%. Meanwhile, the US core CPI, which excludes volatile food and energy prices, rose by 2.6%, missing the expectation of 3.0%. This figure marks the slowest pace since 2021.
  • US ​President Donald ‌Trump said on Thursday that the next chairman of the ⁠‌Federal Reserve (Fed) will be ‍someone who believes in lower ​interest rates "by ‌a lot." Trump further noted that he will ⁠soon announce ​a ​successor to current Fed Chair ‍Jerome ⁠Powell.
  • Fed Governor Christopher Waller, who is under consideration to become chair of the central bank, reiterated his dovish stance on interest rates during a CNBC forum. “Because inflation is still elevated, we can take our time - there’s no rush to get down. We can steadily bring the policy rate down toward neutral,” Waller said.
  • Australia’s Consumer Inflation Expectations, which rose to 4.7% in December from November’s three-month low of 4.5%, support the Reserve Bank of Australia’s (RBA) hawkish stance.

Australian Dollar hovers around nine-day EMA above 0.6600

The AUD/USD pair is trading below 0.6620 on Monday. The technical analysis of the daily chart shows the pair is hovering around the lower ascending channel boundary, indicating the broader trend remains bullish with support holding, while further price action may provide clearer direction. The 14-day Relative Strength Index (RSI) stands at 57.05, reflecting neutral-to-bullish conditions and building momentum. It remains above the midline, keeping bulls in control.

The nine-day Exponential Moving Average (EMA) is trending higher and sits just above the spot, capping upside attempts. However, it has flattened over the past session, signaling sideways short-term momentum. The AUD/USD pair maintains a modest uptrend as the nine-day EMA slope remains positive while price consolidates just below the average.

The AUD/USD pair is hovering near the nine-day EMA at 0.6620. A sustained break above this level would bolster short-term momentum, opening the way toward the three-month high at 0.6685 and then 0.6707, the highest since October 2024. On the downside, a decisive break below the ascending channel could increase downside pressure, exposing the six-month low near 0.6414, marked on August 21.

AUD/USD: Daily Chart

Australian Dollar Price Today

The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the US Dollar.

USD EUR GBP JPY CAD AUD NZD CHF
USD -0.09% -0.19% -0.22% -0.04% -0.25% -0.21% -0.12%
EUR 0.09% -0.10% -0.13% 0.07% -0.17% -0.12% -0.03%
GBP 0.19% 0.10% -0.04% 0.15% -0.06% -0.03% 0.07%
JPY 0.22% 0.13% 0.04% 0.20% -0.01% 0.03% 0.12%
CAD 0.04% -0.07% -0.15% -0.20% -0.21% -0.17% -0.08%
AUD 0.25% 0.17% 0.06% 0.01% 0.21% 0.04% 0.14%
NZD 0.21% 0.12% 0.03% -0.03% 0.17% -0.04% 0.09%
CHF 0.12% 0.03% -0.07% -0.12% 0.08% -0.14% -0.09%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

RBA FAQs

The Reserve Bank of Australia (RBA) sets interest rates and manages monetary policy for Australia. Decisions are made by a board of governors at 11 meetings a year and ad hoc emergency meetings as required. The RBA’s primary mandate is to maintain price stability, which means an inflation rate of 2-3%, but also “..to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people.” Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will strengthen the Australian Dollar (AUD) and vice versa. Other RBA tools include quantitative easing and tightening.

While inflation had always traditionally been thought of as a negative factor for currencies since it lowers the value of money in general, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Moderately higher inflation now tends to lead central banks to put up their interest rates, which in turn has the effect of attracting more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in the case of Australia is the Aussie Dollar.

Macroeconomic data gauges the health of an economy and can have an impact on the value of its currency. Investors prefer to invest their capital in economies that are safe and growing rather than precarious and shrinking. Greater capital inflows increase the aggregate demand and value of the domestic currency. Classic indicators, such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can influence AUD. A strong economy may encourage the Reserve Bank of Australia to put up interest rates, also supporting AUD.

Quantitative Easing (QE) is a tool used in extreme situations when lowering interest rates is not enough to restore the flow of credit in the economy. QE is the process by which the Reserve Bank of Australia (RBA) prints Australian Dollars (AUD) for the purpose of buying assets – usually government or corporate bonds – from financial institutions, thereby providing them with much-needed liquidity. QE usually results in a weaker AUD.

Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Reserve Bank of Australia (RBA) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the RBA stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It would be positive (or bullish) for the Australian Dollar.

Source: Fxstreet