Australian Dollar advances as US Dollar struggles due to Fed concerns
- Australian Dollar halts its three-day losing streak on Monday.
- ANZ Job Advertisements fell 0.5% in December after a revised 1.5% decline previously.
- The US Dollar weakens after federal prosecutors opened a criminal investigation into Fed Chair Jerome Powell.
The Australian Dollar (AUD) rises against the US Dollar (USD) on Monday, following three days of losses. The AUD/USD pair advances as the Greenback weakens, potentially amid concerns surrounding the Federal Reserve.
Federal prosecutors have opened a criminal investigation into Fed Chair Jerome Powell regarding the central bank's renovation of its Washington headquarters and whether Powell lied to Congress about the project's scope, the New York Times reported on Sunday.
ANZ Job Advertisements declined 0.5% in December, following an upwardly revised 1.5% drop in the prior month. Meanwhile, household spending increased 1.0% month-on-month in November 2025, easing from a revised 1.4% rise in October, as consumers remained cautious amid elevated interest rates and persistent inflation.
Australia’s mixed November Consumer Price Index (CPI) left the Reserve Bank of Australia’s (RBA) policy outlook uncertain. However, RBA Deputy Governor Andrew Hauser said that the November inflation data was largely as expected. Hauser added that interest rate cuts are unlikely anytime soon. Focus now shifts to the quarterly CPI report due later this month for clearer guidance on the RBA’s next policy move.
US Dollar declines due to Fed concerns
- The US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, is losing ground and trading around 98.90 at the time of writing. The Greenback struggles amid dovish Federal Reserve (Fed) expectations. December’s slower-than-expected US jobs growth suggests the US central bank could hold interest rates steady later this month.
- US Nonfarm Payrolls (NFP) rose by 50,000 in December, falling short of November's 56,000 (revised from 64,000) and came in weaker than the market expectation of 60,000. However, the Unemployment Rate ticked lower to 4.4% in December from 4.6% in November, while the Average Hourly Earnings climbed to 3.8% YoY in December from 3.6% in the previous reading.
- According to the CME Group's FedWatch tool, Fed funds futures continue to price in about a 95% probability that the US central bank will keep rates unchanged at its January 27–28 meeting.
- Richmond Fed President Tom Barkin said the decline in the unemployment rate was welcome and described job growth as modest but stable. Barkin added that it is difficult to find firms outside healthcare or AI that are hiring and said it remains unclear whether the labor market will tilt toward more hiring or more firing.
- US Treasury Secretary Scott Bessent said in a CNBC interview on Thursday that the Federal Reserve should continue cutting rates, arguing that lower rates are “the only ingredient missing” for even stronger economic growth and that the Fed should not delay.
- The US Department of Labor (DOL) reported on Thursday that Initial Jobless Claims rose modestly to 208,000 in the week ended January 3, slightly below market expectations of 210,000 but above the previous week’s revised 200,000. Continuing jobless claims increased to 1.914 million from 1.858 million, indicating a gradual rise in the number of people remaining on unemployment benefits.
- The Institute for Supply Management (ISM) reported on Wednesday that the US Services PMI rose to 54.4 in December from 52.6 in November. This figure came in stronger than the expectations of 52.3.
- The US Automatic Data Processing (ADP) Employment Change showed an increase of 41,000 jobs in December, following a revised decline of 29,000 in November. The figure came in slightly below market expectations of 47,000. JOLTS Job Openings came in at 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 the market expectations of 7.6 million.
- China’s Consumer Price Index (CPI) rose 0.8% year-over-year (YoY) in December, up from 0.7% in November but below the 0.9% forecast. On a monthly basis, CPI increased 0.2%, reversing November’s -0.1% reading. Meanwhile, China’s Producer Price Index (PPI) fell 1.9% YoY in December, improving from a 2.2% decline previously and slightly beating expectations of a -2.0% print.
- The Australian Bureau of Statistics (ABS) reported last week that Australia’s Trade Surplus narrowed to 2,936M MoM in November, versus 4,353M (revised from 4,385M) in the previous reading. Exports fell by 2.9% MoM in November from a rise of 2.8% (revised from 3.4%) seen a month earlier. Meanwhile, Imports grew by 0.2% MoM in November, compared to a rise of 2.4% (revised from 2.0%) seen in October.
Australian Dollar rebounds toward ascending channel near 0.6700
AUD/USD is trading around 0.6700 on Monday. Daily chart analysis shows the pair attempting a rebound toward an ascending channel, signaling a renewed bullish bias. The 14-day Relative Strength Index (RSI) at 58.33 remains above the midpoint, supporting upside momentum.
A sustained move back inside the channel would strengthen the bullish bias and support AUD/USD toward 0.6766, its highest level since October 2024. Further gains could see the pair test the upper boundary of the ascending channel near 0.6860.
The immediate support lies at the nine-day Exponential Moving Average (EMA) of 0.6700, followed by the 50-day EMA at 0.6631. Further losses would open the downside toward 0.6414, the lowest since June 2025.
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 | -0.21% | -0.16% | -0.11% | -0.16% | -0.12% | -0.18% | -0.35% | |
| EUR | 0.21% | 0.05% | 0.07% | 0.08% | 0.08% | 0.02% | -0.13% | |
| GBP | 0.16% | -0.05% | 0.04% | 0.02% | 0.05% | -0.02% | -0.17% | |
| JPY | 0.11% | -0.07% | -0.04% | -0.04% | -0.01% | -0.07% | -0.22% | |
| CAD | 0.16% | -0.08% | -0.02% | 0.04% | 0.03% | -0.03% | -0.18% | |
| AUD | 0.12% | -0.08% | -0.05% | 0.01% | -0.03% | -0.06% | -0.22% | |
| NZD | 0.18% | -0.02% | 0.02% | 0.07% | 0.03% | 0.06% | -0.15% | |
| CHF | 0.35% | 0.13% | 0.17% | 0.22% | 0.18% | 0.22% | 0.15% |
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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