FX.co ★ Aussie Dollar Weakens on Stronger Greenback

On Monday, the Australian dollar declined to approximately $0.652, erasing gains from the previous week, as a robust US dollar exerted pressure on the currency. The US dollar's strength followed remarks by Federal Reserve officials expressing skepticism about the necessity of a rate cut in December, with some outright rejecting the idea. Currently, markets estimate a roughly 46% probability of a 25 basis point cut next month, a considerable decrease from the almost 88% likelihood predicted earlier. In Australia, market expectations for monetary easing have also diminished. Investors have largely dismissed the probability of an RBA rate cut this year due to recent economic data not sufficiently supporting such a move. Notably, stronger-than-anticipated employment figures have shifted market bets, with swaps now suggesting only a 43.9% chance of a rate cut in May 2026, a significant drop from nearly 70% earlier. With anticipation, investors are now focusing on tomorrow's release of the RBA meeting minutes for further insights into potential policy directions.