The Australian Dollar (AUD) holds firm against the US Dollar (USD) on Thursday following the People’s Bank of China’s (PBoC) decision to leave its Loan Prime Rates (LPRs) unchanged for November. The one-year and five-year LPRs were maintained at 3.00% and 3.50%, respectively. As China is Australia’s largest trading partner, stable Chinese policy rates often help underpin AUD sentiment.
RBA officials highlight cautious policy approach
RBA Assistant Governor Sarah Hunter said Thursday that sustained above-trend growth could reinforce inflation pressures. She noted that monthly inflation data can be volatile and emphasized that the bank will not react to a single month’s reading. Hunter also stated that the RBA is closely monitoring labor-market conditions and assessing how monetary-policy transmission may be evolving.
Steady economic data boosts expectations of prolonged RBA hold
The AUD continues to draw support from expectations that the Reserve Bank of Australia (RBA) will maintain a cautious stance. Minutes from the November meeting signaled that policymakers may keep the cash rate unchanged for an extended period if economic data continues to outperform.
Persistent inflation, steady Q3 wage growth, and last week’s strong employment figures have strengthened the case for the RBA’s tightening cycle being effectively over. ASX 30-Day Interbank Cash Rate Futures reflect this view, showing that as of November 18, the December 2025 contract implied just an 8% probability of a rate cut to 3.35% from 3.60%.
US dollar firms as Fed rate-cut bets fade
The US Dollar Index (DXY) remains elevated around 100.20 as markets await the delayed September US Nonfarm Payrolls (NFP) release. The Greenback gained more than 0.5% in the previous session after traders pared back expectations for a December Federal Reserve (Fed) rate cut, following the latest FOMC minutes. The minutes revealed a divided committee, with several officials not convinced that a December cut is appropriate, even as most still anticipate further easing over time.
According to the CME FedWatch Tool, markets now assign a 33% probability of a 25-basis-point rate cut in December—down sharply from 63% a week earlier. Recent labor-market commentary has reinforced this cautious tone: Richmond Fed President Thomas Barkin said the labor market is showing signs of better balance, while Vice Chair Philip Jefferson highlighted that labor-market risks now outweigh upside inflation risks.
Political headlines added to uncertainty after President Donald Trump said he “would love” to remove Fed Chair Jerome Powell and already has a preferred successor in mind. Meanwhile, recent US data painted a mixed picture, with initial jobless claims rising to 232,000 and ADP figures showing employers cutting an average of 2,500 jobs a week through early November.
Australian wages steady in Q3; RBA minutes signal balanced stance
Australia’s Wage Price Index rose 0.8% in Q3, matching expectations and the prior quarter. Annual wage growth also held steady at 3.4%. RBA minutes published Tuesday reiterated that board members see policy as more balanced and could leave the cash rate unchanged for longer if incoming data remains firm.
AUD/USD trades near 0.6480 within consolidation range
The AUD/USD pair hovers around 0.6480 on Thursday, moving sideways within a defined rectangular consolidation range on the daily chart. The pair remains below the nine-day Exponential Moving Average (EMA), indicating weak short-term momentum.
Immediate support sits at the lower boundary of the rectangle near 0.6470, followed by the five-month low of 0.6414 from August 21. On the upside, the first hurdle is the 0.6500 psychological barrier, reinforced by the nine-day EMA at 0.6503. A breakout above this confluence could clear the way for a move toward the rectangle’s upper boundary near 0.6630.
