The Australian dollar gains against the US dollar (USD) on Thursday after seasonally adjusted Australian employment data reinforces expectations of tighter monetary policy from the Reserve Bank of Australia (RBA).
The Australian Bureau of Statistics (ABS) has published its report on employment change in Australia, which was 65,200 in December, compared to the consensus of 30,000, which saw 28,700 jobs lost. jobs (corrected from 21.3 thousand jobs). Meanwhile, the unemployment rate fell to 4.1% from 4.3% earlier, against the market consensus of 4.4%.
Sean Crick, head of labor statistics at the ABS, said more 15-24-year-olds were in work this month, helping to boost overall employment and fall the unemployment rate.
The International Monetary Fund (IMF) has urged the RBA to remain cautious, stressing that inflation has remained above the Bank’s target range of 2-3% for an extended period, even though headline CPI fell faster than expected in November.
The US dollar is still ahead of GDP and PCE data
- The US Dollar Index (DXY), which measures the value of the US dollar against six major currencies, is holding steady after posting modest gains in the previous session and is trading around 98.80 at the time of writing.
- The dollar gained in value after Bloomberg’s Wednesday news that US President Donald Trump announced he would withdraw from imposing tariffs on goods from European countries opposing his efforts to take over Greenland. He has previously said there is “no retreat” from his ambitions for Greenland, alongside earlier threats to impose novel 10% tariffs on eight European Union (EU) countries.
- President Trump also said that the United States and the North Atlantic Treaty Organization (NATO) “have created a framework for a future agreement regarding Greenland.” However, he did not specify the parameters of the so-called framework and it was not clear what the agreement would consist of.
- Data from the US labor market postponed expectations for further interest rate cuts by the Federal Reserve (Fed) until June. Fed officials have signaled that further easing of monetary policy is not urgent until there is clearer evidence that inflation is steadily moving toward the 2% target. Morgan Stanley analysts revised their forecasts for 2026, now forecasting one rate cut in June and then another in September, compared with earlier expectations for cuts in January and April.
- The People’s Bank of China (PBOC), China’s central bank, announced on Tuesday that it will leave key lending rates (LPR) unchanged. The one-year and five-year LPR rates were 3.00% and 3.50%, respectively. Please note that any changes in the Chinese economy may impact the Australian dollar as both countries are close trading partners.
- China’s industrial production rose 5.2% year-on-year in December, accelerating from 4.8% in November, driven by buoyant export-led manufacturing activity. Meanwhile, retail sales increased by 0.9% y/y, below forecasts of 1.2% and November’s 1.3%.
- The Australian TD-MI inflation index released on Monday rose to 3.5% year-on-year (y/y) in December, up from 3.2% previously. On a monthly basis, inflation rose 1.0% month-on-month (m/m) in December 2025, the fastest pace since December 2023 and a pointed acceleration from 0.3% in the previous two months.
- RBA policymakers have acknowledged that inflation has fallen significantly from its 2022 peak, although the latest data suggests renewed momentum. Headline CPI fell to 3.4% y/y in November, the lowest reading since August, but remains above the RBA’s target band of 2-3%. Meanwhile, the average trimmed CPI fell to 3.2% from an eight-month high of 3.3% in October.
- The RBA said inflation risks had tilted slightly to the upside, while downside risks, particularly related to global conditions, had declined. Council members expect only one additional interest rate cut this year, with core inflation expected to remain above 3% in the near term before falling to around 2.6% by 2027.
The Australian dollar is testing the 0.6800 barrier near the upper boundary of the ascending channel
On Thursday, the AUD/USD pair is trading at around 0.6790. Analysis of the daily charts shows that the pair is rising within an ascending channel, indicating a continued bullish bias. Moreover, the nine-day exponential moving average (EMA) is rising above the 50-day EMA, with spot holding above both, reinforcing the bullish tone. This alignment keeps the rising pressure in place. The 14-day relative strength index (RSI) at 69.93 is near overbought, signaling momentum has stretched.
The AUD/USD pair is testing immediate resistance at the psychological level of 0.6800, followed by the upper boundary of the ascending channel around 0.6810. Further gains above the channel would expose the 0.6942 level, the highest level since February 2023.
On the other hand, the main support is the nine-day EMA at 0.6732. A break below the short-term average would weaken price momentum and lead to the lower boundary of the ascending channel at 0.6680 and then the 50-day EMA at 0.6656.
Today’s Australian dollar price
The table below shows the current percentage change of the Australian Dollar (AUD) against the major listed currencies. The Australian dollar was strongest against the Japanese yen.
| USD | EUR | GBP | JPY | BOOR | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.02% | -0.00% | 0.29% | -0.06% | -0.56% | -0.20% | -0.10% | |
| EUR | 0.02% | 0.02% | 0.28% | -0.04% | -0.53% | -0.17% | -0.08% | |
| GBP | 0.00% | -0.02% | 0.28% | -0.06% | -0.56% | -0.19% | -0.10% | |
| JPY | -0.29% | -0.28% | -0.28% | -0.33% | -0.81% | -0.48% | -0.36% | |
| BOOR | 0.06% | 0.04% | 0.06% | 0.33% | -0.48% | -0.14% | -0.04% | |
| AUD | 0.56% | 0.53% | 0.56% | 0.81% | 0.48% | 0.36% | 0.45% | |
| NZD | 0.20% | 0.17% | 0.19% | 0.48% | 0.14% | -0.36% | 0.10% | |
| CHF | 0.10% | 0.08% | 0.10% | 0.36% | 0.04% | -0.45% | -0.10% |
The heat map shows the percentage changes of the major currencies relative to each other. The base currency is selected from the left column and the quote currency from the top row. For example, if you select Australian Dollar from the left column and move along the horizontal line to US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
Australian Dollar FAQs
One of the most essential factors for the Australian dollar (AUD) is the level of interest rates set by the Reserve Bank of Australia (RBA). As Australia is a resource-rich country, another key factor influencing price is the price of its largest export, iron ore. The health of the Chinese economy, its largest trading partner, is a factor, as well as Australia’s inflation, its dynamics and its trade balance. Market sentiment – whether investors take on riskier assets (risk-on) or look for safe and sound havens (risk-off) – also matters, with positive risk for the AUD.
The Reserve Bank of Australia (RBA) influences the Australian dollar (AUD) by setting the interest rates that Australian banks can lend to each other. This affects the level of interest rates throughout the economy. The RBA’s main goal is to maintain a stable inflation rate of 2-3% by raising or lowering interest rates. Relatively high interest rates compared to other major central banks support the AUD, and the opposite for relatively low ones. The RBA may also operate quantitative easing and tightening to influence lending conditions, the former being AUD negative and the latter AUD positive.
China is Australia’s largest trading partner, so the health of the Chinese economy has a major impact on the value of the Australian dollar (AUD). When the Chinese economy does well, it buys more raw materials, goods and services from Australia, increasing demand for the AUD and increasing its value. The opposite is the case when the Chinese economy is not growing as speedy 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, worth $118 billion a year in 2021 figures, with China being the main buyer. The price of iron ore can therefore influence the Australian dollar. Generally speaking, if the price of iron ore increases, the AUD also increases, as aggregate demand for the currency increases. The opposite is true when 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 for the AUD.
The trade balance, or the difference between what a country earns from exports and what it pays for imports, is another factor that can affect the value of the Australian dollar. If Australia produces a highly sought after export, then its currency will only appreciate in value as a result of the excess demand created by foreign buyers wanting to buy its exports compared to spending on import purchases. Therefore, a positive net trade balance strengthens the AUD, and the effect is opposite if the trade balance is negative.
