Australian Dollar (AUD) advances against the US Dollar (USD) on Monday, extending its gains for the second successive session. The AUD/USD pair strengthens as the AUD receives support from cautious comments from Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser, who highlighted the unusual challenges facing monetary policy and stressed the need to maintain tight conditions to curb inflation.
Deputy Governor Hauser noted that Australia’s monetary policy is navigating a tricky phase, as the economic recovery began with demand already exceeding potential output, leaving limited room for near-term easing. He added that demand was “slightly” above potential when GDP growth accelerated last year, marking the tightest recovery since the early 1980s and signaling little scope for expansion without reigniting inflation pressures.
The AUD also receives support from easing United States (US)-China trade tensions. China’s Ministry of Commerce said that it would temporarily lift its ban on approving exports of “dual-use items” related to gallium, germanium, antimony, and super-hard materials to the US. The suspension takes effect from Sunday until November 27, 2026. Any change in the Chinese economy could impact the AUD as China is a major trading partner for Australia.
China’s Consumer Price Index (CPI) climbed 0.2% year-over-year in October, recovering after a decline of 0.3% in September. The market consensus was for 0% in the reported period. CPI inflation increased 0.2% MoM in October, against 0.1% prior. Producer Price Index (PPI) dropped 2.1% YoY in October, following a 2.3% fall in September. The data came in above the market consensus of -2.2%.
US Dollar steadies amid possible end of US government shutdown
- The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is holding ground and trading around 99.60 at the time of writing. The Greenback moves little following a Bloomberg report, suggesting a group of centrist US Senate Democrats agreed to support a deal to reopen the government and fund some departments and agencies for the next year.
- The agreement would ensure federal employees receive back pay and allow states to resume delayed federal transfers. It would fund some departments through January 30, while others would receive full-year allocations.
- US Treasury Secretary Scott Bessent said on Monday that the US federal shutdown impact getting worse for the economy. Making substantial progress on inflation and expecting prices to come down over the coming months, Bessent added.
- The University of Michigan reported on Friday that its Consumer Sentiment Index dropped to 50.3 in November, the lowest since June 2022, down from 53.6 in October and below expectations of 53.2. US consumer sentiment fell to a three-and-a-half-year low amid growing concerns over the government shutdown.
- The Challenger Job Cuts report announced that companies cut over 153,000 jobs in October, marking the biggest reduction for the month in more than 20 years.
- ADP Employment Change in the US climbed by 42,000 in October, compared to the 29,000 decrease (revised from -32,000) seen in September. This figure came in better than the estimations of 25,000. US ISM Services PMI climbed to 52.4 in October, from 50.0 prior and exceeding analysts’ forecasts of 50.8.
- China’s Trade Balance arrived at CNY640.4 billion for October, narrowing from the previous figure of CNY645.47 billion. China’s Exports fell 0.8% year-over-year (YoY) in October against 8.4% in September. Meanwhile, imports rose 1.4% YoY in the reported period vs. 7.5% recorded previously. In US Dollar (USD) terms, China’s Trade Surplus expanded less than expected in October. Trade Balance arrived at +90.07B versus +95.60B expected and +90.45 prior.
- China’s RatingDog Services Purchasing Managers’ Index (PMI) fell to 52.6 in October from 52.9 in September. The data matched the market forecast of 52.6 in the reported period. Manufacturing PMI declined to 50.6 in October from 51.2 in September. The market forecast was for a 50.9 print.
- Australia’s Trade Surplus widened to 3,938 million month-over-month (MoM) in September, exceeding the 3,850 million expected and 1,111 million (revised from 1,825 million) in the previous reading. Exports rose by 7.9% MoM in September, swinging from a previous decline of 8.7% (revised from -7.8%). Meanwhile, Imports rose by 1.1% MoM, compared to a previous rise of 3.3% (revised from 3.2%).
Australian Dollar targets 50-day EMA near 0.6550
AUD/USD is trading around 0.6520 on Monday. Technical analysis of the daily chart shows the pair consolidating within a rectangle pattern, trading sideways. It is positioned slightly above the nine-day Exponential Moving Average (EMA), indicating a stronger short-term momentum.
The initial barrier lies at the 50-day EMA of 0.6535. A break above this level would improve the medium-term price momentum and support the AUD/USD pair to explore the region around the rectangle’s upper boundary, around 0.6630. Further advances would support the pair to approach the 13-month high of 0.6707, recorded on September 17.
On the downside, the AUD/USD pair may find the immediate support at the psychological level of 0.6500, followed by the lower boundary of the rectangle around 0.6470 and the five-month low of 0.6414, which was recorded on August 21. Further support lies at the six-month low at 0.6372.
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 Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.08% | 0.13% | 0.37% | 0.00% | -0.29% | 0.03% | 0.17% | |
| EUR | -0.08% | 0.05% | 0.28% | -0.08% | -0.37% | -0.05% | 0.09% | |
| GBP | -0.13% | -0.05% | 0.24% | -0.13% | -0.42% | -0.10% | 0.04% | |
| JPY | -0.37% | -0.28% | -0.24% | -0.35% | -0.65% | -0.32% | -0.19% | |
| CAD | -0.00% | 0.08% | 0.13% | 0.35% | -0.30% | 0.02% | 0.17% | |
| AUD | 0.29% | 0.37% | 0.42% | 0.65% | 0.30% | 0.32% | 0.47% | |
| NZD | -0.03% | 0.05% | 0.10% | 0.32% | -0.02% | -0.32% | 0.14% | |
| CHF | -0.17% | -0.09% | -0.04% | 0.19% | -0.17% | -0.47% | -0.14% |
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).
RBA FAQs
The Reserve Bank of Australia (RBA) sets interest rates and manages monetary policy for Australia. Decisions are made by a board of governors at 11 meetings a year and ad hoc emergency meetings as required. The RBA’s primary mandate is to maintain price stability, which means an inflation rate of 2-3%, but also “..to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people.” Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will strengthen the Australian Dollar (AUD) and vice versa. Other RBA tools include quantitative easing and tightening.
While inflation had always traditionally been thought of as a negative factor for currencies since it lowers the value of money in general, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Moderately higher inflation now tends to lead central banks to put up their interest rates, which in turn has the effect of attracting more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in the case of Australia is the Aussie Dollar.
Macroeconomic data gauges the health of an economy and can have an impact on the value of its currency. Investors prefer to invest their capital in economies that are safe and growing rather than precarious and shrinking. Greater capital inflows increase the aggregate demand and value of the domestic currency. Classic indicators, such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can influence AUD. A strong economy may encourage the Reserve Bank of Australia to put up interest rates, also supporting AUD.
Quantitative Easing (QE) is a tool used in extreme situations when lowering interest rates is not enough to restore the flow of credit in the economy. QE is the process by which the Reserve Bank of Australia (RBA) prints Australian Dollars (AUD) for the purpose of buying assets – usually government or corporate bonds – from financial institutions, thereby providing them with much-needed liquidity. QE usually results in a weaker AUD.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Reserve Bank of Australia (RBA) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the RBA stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It would be positive (or bullish) for the Australian Dollar.
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