The Australian Dollar (AUD) holds ground against the US Dollar (USD) on Thursday following the People’s Bank of China (PBoC) interest rate decision. China’s central bank decided to leave its Loan Prime Rates (LPRs) unchanged in November. The one-year and five-year LPRs were at 3.00% and 3.50%, respectively. As China and Australia are close trading partners, China’s policy rates can affect the AUD.
RBA Assistant Governor Sarah Hunter said on Thursday that “sustained above-trend growth could fuel inflationary pressures.” Hunter noted that monthly inflation data can be volatile and that the Bank won’t react to a single month of figures. She added that the RBA is closely assessing labour-market conditions to gauge supply capacity and is examining how the effects of monetary policy may be changing over time.
The AUD/USD pair rebounded after registering more than 0.5% losses in the previous session as the Australian Dollar received support from improved market sentiment, driven by chip giant Nvidia’s blowout earnings.
The AUD also finds support as expectations grow for a cautious stance from the Reserve Bank of Australia (RBA). Minutes from the RBA’s November meeting indicated the central bank may keep rates unchanged for an extended period if economic data continues to outperform. Steady Q3 wage growth, last week’s strong jobs figures, and persistently high inflation have all strengthened the view that the easing cycle has likely ended.
ASX 30-Day Interbank Cash Rate Futures show that as of November 18, the December 2025 contract traded at 96.41, implying an 8% probability of a rate cut to 3.35% from 3.60% at the upcoming RBA Board meeting.
US Dollar surges due to diminishing Fed rate cut bets
- The US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, is remaining stronger and trading around 100.20 at the time of writing. Traders await the release of the US September Nonfarm Payrolls (NFP) later on Thursday, to gain fresh impetus on Fed policy outlook.
- The Greenback gained more than 0.5% in the previous session as markets scaled back expectations for another Federal Reserve (Fed) rate cut in December following latest Federal Open Market Committee (FOMC) Meeting Minutes.
- FOMC Minutes for October 28-29 meeting indicated that Fed officials are divided and cautious about the path forward for interest rates. Most participants indicated further rate cuts would likely be appropriate over time, but several indicated they did not necessarily view a reduction in December as appropriate.
- The CME FedWatch Tool suggests that financial markets are now pricing in a 33% chance that the Fed will cut its benchmark overnight borrowing rate by 25 basis points (bps) at its December meeting, down from 63% probability that markets priced a week ago.
- Richmond Fed President Thomas Barkin said on Tuesday that the labor market appears more balanced, with firms reporting improved worker availability and recent layoffs signalling the need for caution. Barkin noted inflation doesn’t seem to be rising, but it’s also unclear whether it will return to the Fed’s 2% target. He highlighted that, without more decisive data, it remains difficult to reach a broad policy consensus.
- US President Donald Trump said in an Oval Office interview on Tuesday that he “would love” to remove Fed Chair Jerome Powell immediately. Trump added that he already has a preferred candidate in mind for the position, noting that there are “some surprising names” under consideration, though the administration may ultimately choose a more traditional option.
- Federal Reserve Vice Chair Philip Jefferson noted Monday that risks to the labor market now outweigh upside risks to inflation, while stressing that the Fed should proceed “slowly” with any additional rate reductions.
- US Department of Labor’s (DOL) released data on Tuesday showed that there were 232,000 Initial Jobless Claims in the week ended October 18. Continuing Claims came in at 1.957 million, up slightly from 1.926 million in the prior week. For initial claims, weekly data for the previous three weeks weren’t made available. Meanwhile, an Automatic Data Processing (ADP) report showed that employers cut 2,500 jobs a week on average during the four weeks ending November 1.
- National Economic Council Director Kevin Hassett cautioned that some October data may “never materialize,” as several agencies were unable to gather information during the shutdown. Initial private-sector reports suggest a cooling labor market and wavering consumer confidence, with persistent concerns about inflation.
- Australia’s seasonally adjusted Wage Price Index rose 0.8% quarter-on-quarter in Q3, unchanged from the previous period and in line with forecasts. Annually, wages increased 3.4%, also matching both the previous quarter’s pace and market expectations.
- The Reserve Bank of Australia published the Minutes of its November monetary policy meeting on Tuesday, indicating that board members signalled a more balanced policy stance, adding that it could keep the cash rate unchanged for longer if incoming data proves stronger than expected.
Australian Dollar trades near 0.6500 after rebounding from lower rectangle boundary
The AUD/USD pair is trading around 0.6480 on Thursday. The daily chart analysis indicates that the pair is moving sideways within a rectangular range, signalling a period of price consolidation. Meanwhile, the price remains below the nine-day Exponential Moving Average (EMA), highlighting that the short-term price momentum is weaker.
On the downside, the AUD/USD pair finds immediate support at the lower boundary of the rectangle around 0.6470, followed by the five-month low of 0.6414, which was recorded on August 21.
The initial barrier lies at the psychological level of 0.6500, followed by the nine-day EMA of 0.6503. A break above this confluence resistance zone would improve the short-term price momentum and lead the pair to reach the rectangle’s upper boundary near 0.6630.
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 | 0.06% | -0.01% | 0.25% | -0.01% | -0.15% | -0.15% | 0.08% | |
| EUR | -0.06% | -0.07% | 0.16% | -0.07% | -0.21% | -0.20% | 0.02% | |
| GBP | 0.00% | 0.07% | 0.25% | -0.00% | -0.14% | -0.14% | 0.10% | |
| JPY | -0.25% | -0.16% | -0.25% | -0.27% | -0.39% | -0.42% | -0.16% | |
| CAD | 0.01% | 0.07% | 0.00% | 0.27% | -0.13% | -0.14% | 0.11% | |
| AUD | 0.15% | 0.21% | 0.14% | 0.39% | 0.13% | 0.00% | 0.23% | |
| NZD | 0.15% | 0.20% | 0.14% | 0.42% | 0.14% | -0.00% | 0.23% | |
| CHF | -0.08% | -0.02% | -0.10% | 0.16% | -0.11% | -0.23% | -0.23% |
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.
