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The Australian Dollar remains subdued against the US Dollar (USD) on Tuesday after registering modest gains in the previous session. The AUD/USD pair remains subdued after the People’s Bank of China (PBOC), China’s central bank, announced to leave its Loan Prime Rates (LPRs) unchanged on Tuesday. The one-year and five-year LPRs were at 3.00% and 3.50%, respectively. It is important to note that any change in the Chinese economy could impact the Australian Dollar as both countries are close trading partners. The AUD/USD pair may regain its ground as the US Dollar faces challenges amid escalating uncertainty surrounding the United States (US)–Greenland issue. US President Donald Trump said on Saturday that he would impose tariffs on eight European countries opposing his proposal to acquire Greenland. In response, European Union (EU) ambassadors agreed on Sunday to intensify efforts to deter US President Donald Trump from imposing tariffs on European allies, while also preparing retaliatory measures should the duties move forward. Australia’s TD-MI Inflation Gauge, released on Monday, rose to 3.5% year-over-year (YoY) in December, up from 3.2% previously. On a monthly basis, inflation surged 1.0% month-over-month (MoM) in December 2025, the fastest pace since December 2023 and a sharp acceleration from 0.3% in the prior two months. The AUD could find 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. US Dollar declines amid rising US–Greenland concerns The US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, is extending its losses and trading around 99.00 at…

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Filed under: News - @ January 20, 2026 2:19 am