Bold takeaway: AUD/USD is holding steady as the RBA shifts away from a dovish stance and the Fed decision hangs in the balance, making near-term moves crucial for traders.
The AUD/USD pair is hovering around 0.6640, steady after a four-day rally that pushed it to a two-month high. Markets are treading cautiously ahead of Tuesday’s Reserve Bank of Australia (RBA) policy decision and Wednesday’s Federal Reserve meeting.
The Australian Dollar has strengthened on a notable shift in expectations. Traders no longer anticipate further rate cuts from the RBA. Instead, the central bank may signal that monetary easing is unlikely in the near term, given persistent price pressures. In Q3, Australia’s CPI rose 3.2% year over year, up from 2.1% in Q2, indicating inflation remains stubborn.
The consensus is that the RBA will keep the cash rate at 3.6%. Yet, the real driver for the Aussie will be guidance on future policy. Markets no longer price in an imminent OCR cut, and some participants even foresee a potential rate hike in 2026, supported by stronger household spending, which rose 1.3% in October versus 0.3% in September.
However, Commerzbank notes that even with a higher-than-expected November inflation print, the RBA is unlikely to signal imminent hikes. This stance could disappoint some AUD bulls and weigh on the currency.
China’s data adds another supportive factor for the AUD. The National Bureau of Statistics reported a bigger-than-expected trade surplus for November, at around $111.68 billion, driven by a rebound in exports (5.7% in yuan terms after a 0.8% fall in October). Given Australia’s reliance on Chinese demand, these figures reinforce underlying AUD strength.
In the United States, the U.S. dollar faces pressure ahead of the Fed decision. The CME FedWatch tool puts odds at about 87% for a 25-basis-point cut, which would bring the target range to 3.50%-3.75%, as cooling labor markets accumulate evidence. The U.S. Dollar Index (DXY) trades near a five-week low around 98.90, signaling cautious sentiment.
Recent remarks from Fed officials, including John Williams, point to easing in labor demand and slower growth, reinforcing expectations for further rate cuts. Still, an arguably more hawkish posture from Jerome Powell amid a divided committee could cap USD declines if the Fed signals slower progress on cuts in early 2026.
Australian Dollar Price Today
The table below shows the percentage change of the Australian Dollar (AUD) against major currencies today. The AUD was strongest against the Japanese Yen.
USD EUR GBP JPY CAD AUD NZD CHF
USD -0.03% 0.11% 0.22% -0.12% 0.05% -0.14% 0.22%
EUR 0.03% 0.14% 0.24% -0.09% 0.07% -0.11% 0.25%
GBP -0.11% -0.14% 0.10% -0.23% -0.07% -0.25% 0.11%
JPY -0.22% -0.24% -0.10% -0.34% -0.17% -0.37% -0.01%
CAD 0.12% 0.09% 0.23% 0.34% 0.17% -0.03% 0.34%
AUD -0.05% -0.07% 0.07% 0.17% -0.17% -0.19% 0.17%
NZD 0.14% 0.11% 0.25% 0.37% 0.03% 0.19% 0.36%
CHF -0.22% -0.25% -0.11% 0.00% -0.34% -0.17% -0.36%
The heat map illustrates how major currencies move against one another, with the AUD shown here as the base currency in the left column and the quote currencies across the top. For example, selecting AUD as the base and USD as the quote yields the AUD/USD change in the corresponding cell.
