Australian Dollar holds gains following PBOC decision
- 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.
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 | -0.07% | -0.16% | -0.28% | -0.02% | -0.16% | -0.14% | -0.08% | |
| EUR | 0.07% | -0.09% | -0.20% | 0.06% | -0.09% | -0.07% | -0.01% | |
| GBP | 0.16% | 0.09% | -0.11% | 0.15% | 0.00% | 0.02% | 0.08% | |
| JPY | 0.28% | 0.20% | 0.11% | 0.27% | 0.12% | 0.14% | 0.20% | |
| CAD | 0.02% | -0.06% | -0.15% | -0.27% | -0.15% | -0.13% | -0.07% | |
| AUD | 0.16% | 0.09% | -0.00% | -0.12% | 0.15% | 0.02% | 0.08% | |
| NZD | 0.14% | 0.07% | -0.02% | -0.14% | 0.13% | -0.02% | 0.06% | |
| CHF | 0.08% | 0.01% | -0.08% | -0.20% | 0.07% | -0.08% | -0.06% |
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).
Australian Dollar FAQs
One of the most significant 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 key driver is the price of its biggest export, Iron Ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and Trade Balance. Market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – is also a factor, with risk-on positive for AUD.
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 influences the level of interest rates in the economy as a whole. The main goal of the RBA 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 AUD, and the opposite for relatively low. The RBA can also use quantitative easing and tightening to influence credit conditions, with the former AUD-negative and the latter AUD-positive.
China is Australia’s largest trading partner so the health of the Chinese economy is a major influence on the value of the Australian Dollar (AUD). When the Chinese economy is doing well it purchases more raw materials, goods and services from Australia, lifting demand for the AUD, and pushing up its value. The opposite is the case when the Chinese economy is not growing as fast as expected. Positive or negative surprises in Chinese growth data, therefore, often have a direct impact on the Australian Dollar and its pairs.
Iron Ore is Australia’s largest export, accounting for $118 billion a year according to data from 2021, with China as its primary destination. The price of Iron Ore, therefore, can be a driver of the Australian Dollar. Generally, if the price of Iron Ore rises, AUD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Iron Ore falls. Higher Iron Ore prices also tend to result in a greater likelihood of a positive Trade Balance for Australia, which is also positive of the AUD.
The Trade Balance, which is the difference between what a country earns from its exports versus what it pays for its imports, is another factor that can influence the value of the Australian Dollar. If Australia produces highly sought after exports, then its currency will gain in value purely from the surplus demand created from foreign buyers seeking to purchase its exports versus what it spends to purchase imports. Therefore, a positive net Trade Balance strengthens the AUD, with the opposite effect if the Trade Balance is negative.
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