The Australian dollar is experiencing upward pressure, trading around $0.6730, bolstered by a weaker US dollar and heightened expectations of increasing interest rates. The US dollar is facing headwinds due to international trade disputes and uncertainty surrounding the next Federal Reserve Chairman. Investors are also awaiting key Australian employment data, which will influence the Reserve Bank of Australia’s monetary policy outlook.
- The Australian dollar strengthened past $0.67, reaching a one-week high.
- A weaker US dollar provided support for the Australian dollar.
- President Trump’s threat of tariffs on EU countries further weakened the US dollar.
- Expectations of higher interest rates in Australia are also supporting the currency.
- Australia’s Monthly Inflation Gauge rose 1% month-on-month in December 2025.
- The AUD/USD pair trades around 0.6730, up 0.25%.
- The US dollar is underperforming due to disputes with the EU.
- Investors are anticipating Australia’s employment data for December.
- The Unemployment Rate is expected to rise to 4.4% from 4.3%.
The Australian dollar is benefiting from a confluence of factors, primarily the weakness of the US dollar stemming from geopolitical tensions and domestic policy uncertainties. The anticipation of upcoming Australian employment data adds another layer of complexity, as positive figures could further solidify the currency’s strength, while disappointing results could temper its gains. The market is closely watching these developments to gauge the future trajectory of the currency.