Australian Dollar remains stronger as RBA rate hike bets rise – Crypto News

The Australian Dollar (AUD) rises against the US Dollar (USD), reaching a 14-month high of 0.6727 on Monday. The AUD/USD pair strengthens as the Aussie Dollar finds support amid growing expectations of interest rate hikes from the Reserve Bank of Australia (RBA).

The RBA’s December Meeting Minutes indicated that board members are becoming less confident that monetary policy remains sufficiently restrictive. The minutes also indicated the board is prepared to tighten policy if inflation does not ease as anticipated, putting the spotlight on the fourth-quarter CPI report due January 28. Analysts say that a stronger-than-expected Q4 core inflation print could prompt a rate hike at the RBA’s February 3 meeting.

Bloomberg reported Sunday that China’s Ministry of Finance plans to expand targeted investment in priority sectors, including advanced manufacturing, technological innovation, and human capital development. The announcement followed a year-end meeting outlining next year’s fiscal policy priorities. Any impact on China’s economy could affect the AUD, given Australia’s close trade ties with China.

China launched the “Justice Mission 2025” drills on Monday, simulating a blockade around Taiwan, according to China Daily, citing Senior Colonel Shi Yi of the People’s Liberation Army (PLA) Eastern Theater Command. The exercises underscore ongoing geopolitical risk in Asia, keeping markets alert to potential spillovers into shipping, semiconductors, and regional FX if the drills are prolonged or repeated.

US Dollar declines amid ongoing odds of more Fed rate cuts

• The US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, is depreciating and trading around 97.90 at the time of writing. The Greenback faces challenges amid ongoing expectations of two more rate cuts by the Federal Reserve (Fed) in 2026. Traders are likely to focus on the Federal Open Market Committee (FOMC) December Meeting Minutes due on Tuesday.
• The Federal Reserve lowered the interest rates by 25 basis points (bps) at the December meeting, bringing the target range to 3.50%–3.75%. The Fed delivered a cumulative 75 bps of rate cuts in 2025 amid a cooling labor market and still-elevated inflation.
• The CME FedWatch tool shows an 81.7% probability of rates being held at the Fed’s January meeting, up from 77.9% a week earlier. Meanwhile, the likelihood of a 25-basis-point rate cut has fallen to 18.3% from 22.1% a week ago.
• US Initial Jobless Claims declined to 214K from 224K in the prior week, beating the 223K market forecast. Meanwhile, Continuing Jobless Claims rose to 1.923 million from 1.885 million, while the four-week average of Initial Claims edged lower to 216.75K from 217.5K.
• 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.
• Australia’s headline inflation rose to 3.8% in October 2025 from 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.
• Australia’s Consumer Inflation Expectations rose to 4.7% in December from November’s three-month low of 4.5%, supporting the Reserve Bank of Australia’s (RBA) hawkish stance.

Australian Dollar reaches new 14-month highs above 0.6700

AUD/USD is hovering around 0.6720 on Monday. The technical analysis of the daily chart shows the pair is moving upwards within the ascending channel pattern, indicating a persistent bullish bias. The pair holds above a rising nine-day Exponential Moving Average (EMA), preserving the short-term uptrend. The average continues to advance, keeping a bullish bias in place. The 14-day Relative Strength Index (RSI) at 70.24 (overbought) signals strong momentum but stretched conditions.

The immediate resistance aligns at 0.6727, the highest since October 2024, while the daily tone stays positive above the moving average. A break above this level would support the AUD/USD pair to explore the region around the upper boundary of the ascending channel at 0.6830.

Failure to clear the nearby cap could prompt a pause or a dip toward the nine-day EMA at 0.6683, followed by the lower ascending channel boundary around 0.6660. A break below the channel would expose the six-month low near 0.6414, marked on August 21.

(The technical analysis of this story was written with the help of an AI tool.)