Aussie Dollar Rises on Rate Hike Bets

AUDUSD increased to 0.66, the highest since October 2025.

Over the past 4 weeks, Australian Dollar US Dollar gained 1.4%, and in the last 12 months, it increased 2.32%.

The Australian dollar appreciated to around $0.657 on Wednesday, hitting a five-week high, as a broadly weaker US dollar outweighed disappointing domestic GDP data.

The figures showed Australia’s economy expanding less than expected, with Q3 growth at 0.4% versus a 0.7% forecast and annual growth at 2.1%, slightly below expectations.

The softer data led traders to trim bets on the Reserve Bank of Australia turning more hawkish next year, with odds of a rate hike by end-2026 falling to roughly 50% from around 80% before the release.

Attention now turns to next week’s policy meeting, where rates are widely expected to remain at 3.6% after three cuts this year.

Governor Bullock also said the board is closely monitoring inflation and would act if price pressures re-emerge, even as projections point to a gradual easing.

Meanwhile, global markets await the Federal Reserve’s policy meeting next week, widely expected to cut rates, with a dovish Fed chair outlook adding to US dollar weakness.

The Australian dollar strengthened past $0.655, reaching its highest level in over two weeks and extending gains from the previous week, supported by robust economic data that has heightened expectations of potential interest rate hikes by the Reserve Bank of Australia.

The manufacturing PMI climbed to a three-month peak in November, while ANZ-Indeed Job Ads declined at a slower pace, reflecting softer hiring demand.

Last week, the first full monthly price release revealed that price pressures remain elevated, with the headline inflation rate rising to a seven-month high and the trimmed mean inflation, the RBA’s preferred measure of underlying price pressures, exceeding expectations.

Market attention is now turning to this week’s third-quarter GDP release, with forecasts suggesting that strong economic growth could intensify speculation of a rate hike in early 2026.

There are a couple to take note of on the day, as highlighted in bold below.

The first ones are for EUR/USD near the 1.1600 level. The pair has been trending more choppily since the end of October, keeping above 1.1500 but below its 100-day moving average (now seen at 1.1645). The expiries above could help to place a bit of a magnet on price action for the session ahead. But amid a weaker dollar this week, buyers will stay poised to keep the momentum going with the near-term chart also turning more bullish now.

That being said, the Thanksgiving holiday season will begin tomorrow and that may sap out any real market appetite/liquidity for the next two days.

Then, there is one for AUD/USD at the 0.6500 level. The aussie is getting a boost from the stronger monthly CPI data here earlier, quelling expectations for a rate cut. That sees the near-term bias also nudge up to become more bullish again but the expiries could above could keep a lid on things before rolling off later in the day at least.

Another thing to consider is any continuation of the more bullish risk mood, which will act as another tailwind for the aussie in reducing the impact of the expiries in the session ahead.

For more information on how to use this data, you may refer to this post here.

Head on over to investingLive (formerly ForexLive) to get in on the know! This article was written by Justin Low at investinglive.com.

The Australian dollar strengthened around $0.650 on Wednesday, hitting a one-week high, after a stronger-than-expected inflation print reinforced bets of a hawkish RBA policy outlook.

The first full monthly price release showed price pressures remained elevated, with headline inflation accelerating to 3.8% in October, its fastest in seven months and above estimates.

Crucially, trimmed mean inflation, the RBA’s preferred gauge of underlying price pressures, rose to 3.3%, also exceeding forecasts.

A surprisingly strong quarterly inflation reading last month had already prompted the RBA to hold rates steady.

Last week, Assistant Governor Hunter noted the labor market was slightly beyond sustainable levels, with unemployment declining and wage growth remaining elevated, underscoring persistent tightness and supporting the central bank’s cautious stance.

Market pricing now suggests little chance of easing until May next year, while some analysts believe the easing cycle has already ended.

There aren't any major expiries to take note of on the day, with the full list seen below.

As such, trading sentiment will continue to revolve around the risk mood for the most part. In FX, watchful eyes will still be on the likes of the Japanese yen after last week's continued selling but also on AUD/USD as it borders on the edge of the main consolidation range around 0.6420 to 0.6600 since June. On the latter, heavier risk selling will threaten a breakdown and that will be one to keep an eye out for in case.

For more information on how to use this data, you may refer to this post here.

Head on over to investingLive (formerly ForexLive) to get in on the know! This article was written by Justin Low at investinglive.com.