The Australian dollar experienced a decline against the US dollar on Monday, following a gap up at the start of the day. The fall of the AUD/USD pair coincides with the strengthening of the US dollar, largely influenced by a heightened demand for safer currencies, which might be linked to comments made by US President Donald Trump over the weekend.
However, the Australian dollar/USD pair recovered somewhat as the US dollar faced pressure due to speculation regarding a potential intervention in the forex market aimed at supporting the Japanese yen. Bloomberg reported that traders have noted the New York Fed conducted interest rate checks on major banks, a move interpreted as a preparation for possible intervention.
Positive PMI data from Australia, along with encouraging employment statistics, led to speculation that the Reserve Bank of Australia (RBA) might adopt a tighter monetary policy. While RBA policymakers recognized a resurgence in economic momentum, they pointed out that inflation had notably decreased from last year’s peak. The headline CPI dropped to 3.4% year-on-year in November, still above the RBA’s preferred range of 2-3%.
Demand for Safe Assets Boosts USD
- The US Dollar Index (DXY), which gauges the dollar’s value against six major currencies, has regained some stability and is around 97.10 at the moment.
- Over the weekend, President Trump threatened to implement 100% tariffs on Canadian goods if Canada signs a trade agreement with China. Canadian Prime Minister Mark Carney responded, stating Canada has no intention of pursuing such an agreement, clarifying that the recent deal with Beijing only aimed to reduce tariffs in select sectors.
- In the third quarter of 2025, the U.S. GDP grew at an annualized rate of 4.4%, slightly surpassing expectations and the previous figure of 4.3%. Additionally, new unemployment insurance claims last week numbered 200,000, which is lower than the anticipated 212,000.
- The US Personal Consumption Expenditures (PCE) price index increased by 2.8% year-on-year in November from 2.7% in October, with a monthly rise of 0.2%. The annual Core PCE Price Index, which the Federal Reserve uses as its inflation measure, also rose by 2.8%, aligning with market expectations.
- President Trump mentioned he would reconsider imposing tariffs on European products opposing claims over Greenland, though he previously stated there was “no going back” on his ambitions regarding Greenland and had hinted at imposing new tariffs on eight EU nations.
- He also remarked that the United States and NATO have established a framework for a potential agreement regarding Greenland, but the specifics of this framework were not clarified, leaving its implications somewhat vague.
- Fed officials indicated that there is no immediate need for further easing unless there’s substantial evidence of inflation moving towards the 2% target. Analysts at Morgan Stanley updated their outlook for 2026, now predicting one rate cut in June followed by another in September, adjusting from previous expectations of cuts in January and April.
- Australia’s S&P Global Manufacturing Purchasing Managers’ Index (PMI) rose to 52.4 in January, an improvement from 51.6. The Services PMI increased to 56.0 from 51.1, while the Composite PMI rose to 55.5 from 51.0 during the same timeframe.
- In December, employment levels changed by 65,000, which is significantly higher than the consensus estimate of 30,000 and a drop from November’s figures. The unemployment rate fell to 4.1%, contrary to the market expectation of 4.4%.
AUD Holds Above 0.6900 Near Ascending Channel Boundary
The AUD/USD pair is trading at approximately 0.6920 on Monday. Analyzing the daily charts reveals that the pair is moving within an ascending channel pattern, suggesting a continued bullish sentiment. The 14-day Relative Strength Index (RSI) is currently at 80.06, indicating an overbought condition and a possible lack of momentum.
The AUD/USD may encounter resistance near the upper boundary of the ascending channel around 0.6942, marking its highest point since February 2023. On the downside, key support is found at the 9-day EMA near the 0.6800 level, which aligns with the lower boundary of the ascending channel. A drop below this channel could weaken the bullish outlook and target the 50-day EMA at 0.6676.
Current Australian Dollar Price
The following table displays the percentage changes in the Australian Dollar (AUD) against major currencies today, with the Australian dollar being the weakest against the Japanese yen.
| USD | EUR | GBP | JPY | CAD | australian dollar | new zealand dollar | swiss franc | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.33% | -0.18% | -1.14% | -0.13% | -0.28% | -0.20% | -0.57% | |
| EUR | 0.33% | 0.15% | -0.80% | 0.20% | 0.05% | 0.12% | -0.25% | |
| GBP | 0.18% | -0.15% | -0.95% | 0.05% | -0.11% | -0.03% | -0.39% | |
| JPY | 1.14% | 0.80% | 0.95% | 1.02% | 0.86% | 0.94% | 0.57% | |
| CAD | 0.13% | -0.20% | -0.05% | -1.02% | -0.15% | -0.07% | -0.44% | |
| australian dollar | 0.28% | -0.05% | 0.11% | -0.86% | 0.15% | 0.08% | -0.28% | |
| new zealand dollar | 0.20% | -0.12% | 0.03% | -0.94% | 0.07% | -0.08% | -0.37% | |
| swiss franc | 0.57% | 0.25% | 0.39% | -0.57% | 0.44% | 0.28% | 0.37% |
This heat map displays the percentage changes across major currencies. The base currency is identified in the left column, and the quoted currency runs across the top row. For instance, selecting Australian Dollars from the left column and aligning with US Dollars horizontally shows the percentage change noted in the box.
