Australian Dollar gains as traders expect RBA rate hikes
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The Australian Dollar (AUD) advances against the US Dollar (USD) on Wednesday, continuing its winning streak for the third successive session. The AUD/USD pair strengthens as the Aussie Dollar finds support following the release of the Reserve Bank of Australia’s (RBA) December Meeting Minutes, which indicated that board members are becoming less confident that monetary policy remains sufficiently restrictive. Australia’s headline inflation rose to 3.8% in October 2025from 3.6% in September, remaining above the RBA’s 2–3% target range. As a result, markets are increasingly pricing in a rate hike as early as February 2026, with both the Commonwealth Bank of Australia and National Australia Bank projecting a rise to 3.85% at the RBA’s first policy meeting of the year. The AUD/USD pair also appreciates as the US Dollar (USD) faces challenges amid growing expectations for two rate cuts by the Federal Reserve (Fed) in 2026, reinforced by President Donald Trump’s calls for lower borrowing costs. US Dollar declines on Fed rate cut bets The US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, is losing ground and trading around 97.80 at the time of writing. The Greenback weakens in thin, holiday-shortened trading as expectations for further Fed rate cuts next year continued to weigh on sentiment. White House Adviser Kevin Hassett said on Tuesday that the Fed is not cutting interest rates quickly enough, even though the US economy grew at a much faster-than-expected pace in the third quarter, as per a CNBC report. The US Bureau of Economic Analysis (BEA) released delayed data showing that preliminary US Gross Domestic Product (GDP) Annualized expanded 4.3% in the July–September period. The reading exceeded market expectations of a 3.3% increase and surpassed the 3.8% growth recorded in the previous quarter. US core Personal Consumption Expenditures…
Filed under: News - @ December 24, 2025 2:28 am