Expectations are rising that the Reserve Bank of Australia (RBA) will confirm a pivot toward tightening in its final decision of the year.

AUD/USD trades steadily around 0.6640 at the time of writing on Monday, after a four-day rally that pushed the pair to two-month highs. The consolidation comes as investors turn cautious ahead of Tuesday’s Reserve Bank of Australia (RBA) decision and Wednesday’s Federal Reserve (Fed) announcement.

The Japanese Yen (JPY) slips 0.2% versus the US Dollar (USD), underperforming the G10, as rising US yields and firm domestic rate expectations weigh on the currency.

The Canadian Dollar (CAD) edges higher against the US Dollar (USD) on Monday, extending gains as investors continue to favour the Loonie on diverging expectations for the Bank of Canada (BoC) and the Federal Reserve (Fed).

The Pound Sterling (GBP) trades slightly lower versus the US Dollar (USD), consolidating after a strong budget-driven rally.

The Euro (EUR) is entering Monday’s NA session flat to the US Dollar (USD) with an extension of its recent consolidation in the mid-1.16s, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

Sluggish labor market conditions in the US contrast with resilient trends in Canada after another strong headline beat for Canadian data Friday, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

The US Dollar extends gains for the second consecutive day against the Yen on Monday, and tests December’s highs, at the 155.50 area, as the safe-haven Japanese Yen loses ground against its main peers in an otherwise calm trading session.Monetary policy expectations remain the primary market mover w

USD/JPY climbs as markets price in a 25bps Bank of Japan (BOJ) hike on December 19, supported by fiscal stimulus and upside risks to Japanese wage growth, though fair value suggests a longer-term move toward 140, BBH FX analysts report.

European Central Bank (ECB) policymaker Peter Kazimir said in the European session on Monday that he doesn’t see any reason of monetary policy adjustment in the policy meeting this month.

EUR/USD is steady near 1.1650 as ECB’s Isabel Schnabel signals comfort with markets pricing in a potential future rate hike, BBH FX analysts report.

The Euro is picking up from six-week lows around 0.8725 on Monday, but remains capped below a previous support area at 0.8750 so far.

US Dollar (USD) is likely to trade in a range between 154.80 and 155.80. In the longer run, for a sustained decline, USD must first close below 154.65, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Although the major US labour market report was not published on Friday, figures from Canada were released. With roughly 53,000 jobs added in November, the figures were positive once again.

There is scope for New Zealand Dollar (NZD) to test 0.5800 before the risk of a pullback increases. In the longer run, the price action continues to suggest a higher NZD; the levels to watch are 0.5800 and 0.5835, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

The Reserve Bank of Australia (RBA) is widely expected to keep interest rates unchanged, with markets already pricing in the decision ahead of tomorrow’s announcement.

EUR/JPY trades around 181.10 on Monday, up 0.15% at the time of writing, as fundamental momentum turns more favorable for the Euro (EUR) at the start of the week.

Australian Dollar (AUD) is likely to trade in a higher range of 0.6625/0.6655. In the longer run, further AUD strength is not ruled out; it remains to be seen if 0.6685 is within reach, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Pound Sterling (GBP) is likely to trade in a range between 1.3290 and 1.3360. In the longer run, GBP is expected to continue to rise, potentially to 1.3410, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

The AUD/JPY pair demonstrates strength near a fresh 16-month high around 103.20 during the European trading session on Monday. The cross trades firmly as the Australian Dollar (AUD) outperforms its peers ahead of the monetary policy announcement by the Reserve Bank of Australia (RBA) on Tuesday.

The Pound has opened the week on a mild positive note, while the Japanese Yen drops across the board amid the positive market mood. The pair is trending higher, after bouncing at 206.20 lows on Friday, with bulls eyeing 17-month highs, at 207.35.The fundamental context remains pound-supportive.

The Eurozone Sentix Investor Confidence Index improves significantly to -6.2 in December from -7.4 in November.

Isabel Schnabel’s remarks on upside growth risks—spanning consumption, investment, and government spending—boosted the Euro (EUR) in early trade.

Eurozone Sentix Investor Confidence: -6.2 (December) vs -7.4

AUD/USD has pushed higher after reclaiming the 200-DMA and breaking a multi-year trend line, with the pair approaching the 0.6685-0.6710 resistance zone, Société Générale's FX analysts note.

European Central Bank (ECB) Governing Council member and Finnish central bank governor, Olli Rehn, said in an interview with Econostream during the European trading session on Monday that downside risks to inflation in the Eurozone economy are dominating at the moment.

The New Zealand Dollar maintains its positive trend intact in a calm week opening.

The Pound Sterling (GBP) trades calmly against its major currency peers at the start of the week, hovering at around 1.3320 against the US Dollar (USD).

EUR/USD is trading higher on Monday, but remains within last week's range, changing hands at 1.1665 at the time of writing after bouncing from 1.1630 lows on Friday.

The US Dollar remains in a strongly bearish trend against the Canadian Dollar. The pair lost nearly 2% in the last two weeks, and upside attempts remain limited.