The Australian dollar (AUD) maintained gains against the US dollar (USD) on Monday after the People’s Bank of China (PBOC), China’s central bank, announced it would leave key loan interest rates (LPRs) unchanged. The average loan coverage ratio for one year and five years was 3.00% and 3.50%, respectively.
Traders are likely to focus on the minutes of the Reserve Bank of Australia (RBA) meeting scheduled for Tuesday, for clues on the central bank’s policy outlook and its assessment of inflationary pressures. As of December 18, the February 2026 ASX 30-day interbank rate futures contract was trading at 96.34, indicating a 27% probability of the rate increasing to 3.85% at the next RBA board meeting.
The US dollar breaks a three-day winning streak despite Fed caution
- 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 98.60 level at the time of writing. Traders await the annual US third-quarter GDP report scheduled for Tuesday.
- Cleveland Fed President Beth Hammack said Sunday that monetary policy is well positioned to pause and assess the effects of 75 basis point interest rate cuts on the economy during the first quarter, according to Bloomberg.
- The University of Michigan reported Friday that its consumer confidence index was revised down to 52.9 in December from the previous reading of 53.3. The consumer expectations index fell to 54.6 from 55.0. Meanwhile, one-year inflation expectations were revised to 4.2% from 4.1% in both the initial estimate and the previous month.
- The summary of economic forecasts, or so-called “point chart”, indicated average expectations of just one additional rate cut in 2026. The CME FedWatch tool shows a 79.0% probability of holding interest rates at the Fed’s January meeting, up from 75.6% the week before. Meanwhile, the probability of a 25 basis point rate cut fell 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) fell to 2.7% in November. This reading was lower than market expectations of 3.1%. Meanwhile, the US core CPI, which excludes volatile food and energy prices, rose 2.6%, missing expectations of 3.0%. This number represents the slowest pace since 2021.
- US President Donald Trump said on Thursday that the next head of the Federal Reserve will be someone who believes in cutting interest rates “significantly.” Trump also indicated that he will soon announce a successor to current Fed Chairman Jerome Powell.
- Fed Governor Christopher Waller, who is under consideration to become head of the central bank, reiterated his dovish stance on interest rates during a CNBC forum. “Since inflation is still high, we can take our time – there is no rush to get down,” Waller said. “We can steadily lower the interest rate towards neutral.”
- 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 hawkish stance.
The Australian dollar is hovering around the nine-day EMA above 0.6600
AUD/USD is trading below 0.6620 on Monday. Technical analysis on the daily chart shows that the pair is hovering around the lower border of an ascending channel, indicating that the broader trend remains bullish with support holding, while further price action may provide a clearer direction. The 14-day RSI stands at 57.05, reflecting neutral to bullish conditions and growing momentum. It stays above the center line, keeping the bulls in control.
The nine-day Exponential Moving Average (EMA) is trending higher and is located just above the spot price, capping upward attempts. However, it stabilized during the last session, indicating sideways momentum in the short term. AUD/USD is maintaining a modest uptrend as the slope of the nine-day EMA remains positive while the price is consolidating just below the average.
The AUD/USD pair is hovering near the nine-day moving average at 0.6620. A sustained break above this level would boost short-term momentum, opening the way towards a 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 bearish pressure, exposing a six-month low near 0.6414, which was recorded on August 21.
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 US dollar.
| US dollars | euro | GBP | JPY | Canadian | Australian dollar | New Zealand dollar | Swiss franc | |
|---|---|---|---|---|---|---|---|---|
| US dollars | -0.05% | -0.15% | -0.20% | -0.04% | -0.26% | -0.20% | -0.06% | |
| euro | 0.05% | -0.10% | -0.15% | 0.04% | -0.19% | -0.13% | -0.01% | |
| GBP | 0.15% | 0.10% | -0.04% | 0.11% | -0.12% | -0.03% | 0.09% | |
| JPY | 0.20% | 0.15% | 0.04% | 0.18% | -0.05% | 0.03% | 0.16% | |
| Canadian | 0.04% | -0.04% | -0.11% | -0.18% | -0.23% | -0.15% | -0.02% | |
| Australian dollar | 0.26% | 0.19% | 0.12% | 0.05% | 0.23% | 0.08% | 0.20% | |
| New Zealand dollar | 0.20% | 0.13% | 0.03% | -0.03% | 0.15% | -0.08% | 0.12% | |
| Swiss franc | 0.06% | 0.01% | -0.09% | -0.16% | 0.02% | -0.20% | -0.12% |
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.
