The Australian dollar (AUD) rose against the US dollar (USD) on Monday, after three days of losses. AUD/USD advances as the dollar weakens, perhaps amid concerns surrounding the Federal Reserve.
Federal prosecutors have opened a criminal investigation into Federal Reserve Chairman Jerome Powell related to the central bank’s renovation of its Washington headquarters and whether Powell lied to Congress about the scope of the project, The New York Times reported Sunday.
ANZ job advertisements fell 0.5% in December, after an upwardly revised 1.5% decline in the previous month. Meanwhile, household spending increased 1.0% month-on-month in November 2025, retreating from a revised 1.4% rise in October, as consumers remained cautious amid rising interest rates and persistent inflation.
November’s mixed Australian Consumer Price Index (CPI) left the Reserve Bank of Australia’s (RBA) policy outlook uncertain. However, RBA Deputy Governor Andrew Hauser said November inflation data was largely as expected. Hauser added that interest rate cuts are unlikely any time soon. The focus now turns to the quarterly CPI report due later this month for clearer guidance on the RBA’s next policy move.
The US dollar falls on Fed concerns
- The US Dollar Index (DXY), which measures the value of the US dollar against six major currencies, is losing ground and is trading around the 98.90 level at the time of writing. The US dollar faces difficulties amid dovish expectations from the Federal Reserve. Slower-than-expected US job growth in December suggests the US central bank may keep interest rates steady later this month.
- US nonfarm payrolls rose by 50,000 in December, lower than the 56,000 in November (revised from 64,000) and weaker than market expectations of 60,000. However, the unemployment rate fell to 4.4% in December from 4.6% in November, while average hourly earnings rose to 3.8% year-on-year in December from 3.6% in the previous reading.
- According to CME Group’s FedWatch tool, Federal Reserve funds futures continue to be priced at a roughly 95% probability that the US central bank will keep interest rates unchanged at its meeting on January 27-28.
- Richmond Fed President Tom Barkin said the lower unemployment rate was welcome and described job growth as modest but stable. Barkin added that it’s difficult to find companies outside of healthcare or artificial intelligence that are hiring, and said it’s still unclear whether the job market will tilt toward more hiring or more layoffs.
- US Treasury Secretary Scott Besent said in an interview with CNBC on Thursday that the Fed should continue to cut interest rates, arguing that low interest rates are “the one missing ingredient” for stronger economic growth and that the Fed should not delay.
- The U.S. Department of Labor (DOL) reported Thursday that initial jobless claims rose modestly to 208,000 in the week ending January 3, slightly below market expectations of 210,000 but higher than the revised 200,000 the week before. Continuing unemployment claims rose to 1.914 million from 1.858 million, indicating a gradual increase in the number of people remaining on unemployment benefits.
- The Institute for Supply Management (ISM) reported Wednesday that the U.S. Services PMI rose to 54.4 in December from 52.6 in November. This number was stronger than expectations at 52.3.
- U.S. Automated Data Processing (ADP) employment change showed an increase of 41,000 jobs in December, after a revised decline of 29,000 in November. This number came in slightly below market expectations of 47,000. Job openings in JOLTS reached 7.146 million in November. This reading followed the 7.449 million openings recorded in October (revised from 7.67 million) and came in below market expectations of 7.6 million.
- China’s CPI rose 0.8% year-on-year in December, up from 0.7% in November but below expectations of 0.9%. On a monthly basis, the CPI rose by 0.2%, contrary to the November reading of -0.1%. Meanwhile, China’s producer price index fell 1.9% year-on-year in December, improving from a previous 2.2% decline and slightly beating expectations for a reading of -2.0%.
- The Australian Bureau of Statistics (ABS) reported last week that Australia’s trade surplus narrowed to 2,936 million month-on-month in November, compared to 4,353 million (revised from 4,385 million) in the previous reading. Exports fell by 2.9% month-on-month in November from a rise of 2.8% (revised from 3.4%) in the previous month. Meanwhile, imports rose 0.2% month-on-month in November, compared to a 2.4% rise (revised from 2.0%) in October.
The Australian dollar is bouncing towards the rising channel near 0.6700
The AUD/USD pair is trading around 0.6700 on Monday. Analysis of the daily chart shows that the pair is trying to bounce towards an upward channel, indicating a renewed bullish bias. The 14-day RSI remains at 58.33 above the midpoint, supporting the bullish momentum.
A sustained move back inside the channel would reinforce the bullish bias and support the AUD/USD pair towards 0.6766, its highest level since October 2024. Further gains could see the pair test the upper border of the bullish channel near 0.6860.
Immediate support lies at the nine-day exponential moving average (EMA) at 0.6700, followed by the 50-day EMA at 0.6631. Further losses will open a downtrend towards 0.6414, the lowest level since June 2025.
Australian dollar price today
The table below shows the percentage change in the Australian Dollar (AUD) against the major currencies listed today. The Australian dollar was the strongest against the Japanese yen.
| US dollars | euro | GBP | JPY | Canadian | Australian dollar | New Zealand dollar | Swiss franc | |
|---|---|---|---|---|---|---|---|---|
| US dollars | -0.29% | -0.21% | 0.09% | -0.15% | -0.10% | -0.24% | -0.35% | |
| euro | 0.29% | 0.09% | 0.37% | 0.13% | 0.19% | 0.06% | -0.05% | |
| GBP | 0.21% | -0.09% | 0.30% | 0.04% | 0.11% | -0.03% | -0.14% | |
| JPY | -0.09% | -0.37% | -0.30% | -0.25% | -0.20% | -0.33% | -0.44% | |
| Canadian | 0.15% | -0.13% | -0.04% | 0.25% | 0.05% | -0.08% | -0.19% | |
| Australian dollar | 0.10% | -0.19% | -0.11% | 0.20% | -0.05% | -0.14% | -0.25% | |
| New Zealand dollar | 0.24% | -0.06% | 0.03% | 0.33% | 0.08% | 0.14% | -0.11% | |
| Swiss franc | 0.35% | 0.05% | 0.14% | 0.44% | 0.19% | 0.25% | 0.11% |
The heat map shows the percentage changes in major currencies versus each other. The base currency is chosen from the left column, while the counter currency is chosen from the top row. For example, if you select 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).
Frequently asked questions about the Australian dollar
One of the most important factors for the Australian Dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). Because Australia is a resource-rich country, another major driver is the price of its largest export, iron ore. The health of the Chinese economy, its largest trading partner, is one factor, in addition to Australia’s inflation, its growth rate and its trade balance. Market sentiment – whether investors are snapping up riskier assets (risk on) or looking for safe havens (risk off) – is also a factor, with risk appetite positive for the Australian dollar.
The Reserve Bank of Australia (RBA) influences the Australian dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This affects the level of interest rates in the economy as a whole. The RBA’s main objective is to maintain a stable inflation rate of 2-3% by adjusting interest rates up or down. Relatively high interest rates compared to other major central banks support the Australian dollar, and relatively low interest rates. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former being AUD negative and the latter AUD positive.
China is Australia’s largest trading partner, so the health of the Chinese economy has a major impact on the value of the Australian Dollar (AUD). When the Chinese economy is performing well, it buys more raw materials, goods and services from Australia, which raises demand for the Australian dollar, raising its value. The opposite is the case when the Chinese economy does not grow as quickly as expected. Therefore, positive or negative surprises in Chinese growth data often have a direct impact on the Australian dollar and its crosses.
Iron ore is Australia’s largest export, representing $118 billion annually according to 2021 data, and China is its main destination. Therefore, the price of iron ore could be a driver of the Australian dollar. In general, if the price of iron ore rises, the Australian dollar also rises, as overall demand for the currency increases. The opposite is the case if the price of iron ore falls. Higher iron ore prices also tend to increase the likelihood of a positive trade balance for Australia, which is also positive for the Australian dollar.
The balance of trade, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can affect the value of the Australian dollar. If Australia produces highly sought-after exports, its currency will gain value from the excess demand generated by foreign buyers seeking to buy its exports in exchange for what it spends to buy imports. Therefore, a positive net trade balance strengthens the Australian dollar, with the opposite effect if the trade balance is negative.
