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The Australian Dollar gains ground against the US Dollar (USD) on Wednesday, extending its gains for the third successive session. The AUD/USD pair appreciates as the Greenback continues to lose ground amid rising United States (US)–Greenland concerns. The Westpac–Melbourne Institute Leading Economic Index for Australia rose 0.1% month-on-month (MoM) in December 2025, after remaining unchanged in the prior month. At the same time, the six-month annualized growth rate increased to 0.42% from 0.20% in November, indicating that the economic recovery through 2025 is extending into early 2026. The AUD also finds support as emerging upward price pressures strengthen expectations of tighter monetary policy from the Reserve Bank of Australia (RBA). The International Monetary Fund (IMF) has urged the RBA to remain cautious, highlighting that inflation has stayed above the Bank’s 2%–3% target band for a prolonged period, even though headline CPI eased more quickly than anticipated in November. The People’s Bank of China (PBOC), China’s central bank, announced on Tuesday that it would leave its Loan Prime Rates (LPRs) unchanged. The one-year and five-year LPRs were at 3.00% and 3.50%, respectively. It is essential to note that any changes in the Chinese economy could impact the Australian Dollar, as both countries are close trading partners. US Dollar weakens as US–Greenland concerns aggravate The US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, is extending its losses and trading around 98.50 at the time of writing. US President Donald Trump said there is “no going back” on his ambitions regarding Greenland, alongside earlier threats to impose new 10% tariffs on eight European Union (EU) countries, fueling concerns over slower economic growth. The European Parliament plans to suspend approval of the US trade deal agreed in July, with the decision set to be announced on…

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Filed under: News - @ January 21, 2026 3:27 am