FX.co ★ Australian Dollar Hits Five-Week High

The Australian dollar rose to approximately $0.657 on Wednesday, reaching a five-week peak, as the U.S. dollar weakened significantly despite Australia's lackluster GDP data. The recent figures revealed Australia's economy grew less than anticipated, with third-quarter growth at 0.4% compared to a 0.7% projection, and yearly growth at 2.1%, falling slightly short of expectations. This softer economic data prompted traders to scale back predictions of the Reserve Bank of Australia adopting a more aggressive monetary stance next year. The likelihood of a rate hike by the end of 2026 has consequently decreased to about 50%, down from approximately 80% before these figures were released. All eyes are now on the upcoming policy meeting, where it is expected that interest rates will hold steady at 3.6%, following three rate cuts earlier this year. Governor Bullock emphasized that the board is vigilantly observing inflation trends and is prepared to act if inflationary pressures resurface, despite current forecasts suggesting a gradual decrease. Meanwhile, global investors are focused on next week's Federal Reserve policy meeting, where a rate cut is anticipated. This dovish outlook from the Fed chair is expected to contribute further to the U.S. dollar's weakness.