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AUD/USD gains as US Dollar falters on Fed Chair speculation, RBA hawkish tone

  • AUD/USD moves toward 0.6600, supported by persistent US Dollar weakness.
  • Speculation about a potential replacement for the Fed Chair weighs further on the US Dollar.
  • Hawkish comments from the RBA and solid domestic fundamentals keep the Aussie supported.

AUD/USD trades firmly on Wednesday, around 0.6590 at the time of writing, up 0.50% on the day. The pair remains supported by the underperformance of the US Dollar (USD), which continues to weaken amid expectations of a possible leadership change at the Federal Reserve (Fed) and a stream of data pointing to slowing US economic momentum.

The US Dollar remains pressured after speculation emerged that Kevin Hassett, the current White House economic adviser, could become the successor to Jerome Powell, whose term as Fed Chair ends in May. Hassett has previously expressed support for lower interest rates, reinforcing expectations of a more dovish monetary stance. This prospect is directly weighing on the USD.

US data released on Tuesday and Wednesday extend this negative bias. The latest ISM Services Purchasing Managers Index (PMI) shows services activity still expanding but losing momentum, with a sharp slowdown in new orders and a sixth consecutive monthly contraction in employment. Final S&P Global US Services PMI figures also point to moderating activity. Meanwhile, the ADP Employment Change report revealed a drop of 32,000 jobs in November, contrasting with expectations of job gains and strengthening the view that the Fed is likely to cut rates at next week’s policy meeting.

In Australia, the Australian Dollar (AUD) remains resilient despite weaker-than-expected third-quarter growth. Gross Domestic Product (GDP) rose 0.4% QoQ versus 0.7% expected, though the details of the report remain generally encouraging.

Comments from the Reserve Bank of Australia (RBA) reinforce this resilience. Governor Michele Bullock indicated that further tightening would be needed if inflation proves persistent, noting that the labor market remains “a little tight” and that the output gap is likely “closed”.

Market attention now turns to Australia’s Trade Balance data due Thursday, while US traders await Friday’s Personal Consumption Expenditures (PCE) report. The final major input before the Fed decides on monetary policy.

Australian Dollar Price Today

The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the US Dollar.

USD EUR GBP JPY CAD AUD NZD CHF
USD -0.40% -0.98% -0.47% -0.24% -0.47% -0.66% -0.43%
EUR 0.40% -0.58% -0.05% 0.15% -0.08% -0.26% -0.03%
GBP 0.98% 0.58% 0.54% 0.74% 0.51% 0.32% 0.55%
JPY 0.47% 0.05% -0.54% 0.22% -0.01% -0.18% 0.03%
CAD 0.24% -0.15% -0.74% -0.22% -0.23% -0.43% -0.19%
AUD 0.47% 0.08% -0.51% 0.01% 0.23% -0.18% 0.04%
NZD 0.66% 0.26% -0.32% 0.18% 0.43% 0.18% 0.23%
CHF 0.43% 0.03% -0.55% -0.03% 0.19% -0.04% -0.23%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

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