FX.co ★ Australian Dollar Snaps 3-Session Decline

The Australian dollar strengthened to approach $0.67 on Monday, breaking a three-session decline, as markets continued to forecast a potential cash rate increase from the Reserve Bank of Australia (RBA) later in the year. RBA Deputy Governor Andrew Hauser recently highlighted that inflation levels remain "too high," indicating that the easing cycle could be at its end. Last month, RBA Governor Michele Bullock cautioned that the next policy action could be an interest rate hike, following inflation rates once again surpassing the RBA’s target range of 2–3%. These hawkish remarks were considered alongside data showing a 1% rise in household spending month-on-month in November 2025, softening from October's 1.4% increase yet exceeding expectations of a 0.6% rise. On the labor market front, the ANZ-Indeed Australian Job Ads recorded a 0.5% month-on-month decline in November, marking the sixth straight monthly drop. Externally, the Australian dollar found support from a weaker US dollar, amid reports of a criminal investigation into Federal Reserve Chair Powell, in addition to US nonfarm payrolls increasing expectations for further policy easing this year.