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 central 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 declining 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% | -0.04% | 0.25% | -0.03% | -0.29% | -0.25% | 0.07% | |
| EUR | -0.06% | -0.10% | 0.16% | -0.09% | -0.35% | -0.32% | 0.00% | |
| GBP | 0.04% | 0.10% | 0.27% | 0.02% | -0.25% | -0.22% | 0.11% | |
| JPY | -0.25% | -0.16% | -0.27% | -0.26% | -0.52% | -0.53% | -0.18% | |
| CAD | 0.03% | 0.09% | -0.02% | 0.26% | -0.25% | -0.25% | 0.11% | |
| AUD | 0.29% | 0.35% | 0.25% | 0.52% | 0.25% | 0.03% | 0.36% | |
| NZD | 0.25% | 0.32% | 0.22% | 0.53% | 0.25% | -0.03% | 0.33% | |
| CHF | -0.07% | -0.01% | -0.11% | 0.18% | -0.11% | -0.36% | -0.33% |
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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