Australian Dollar Extends Recovery on Hauser’s Cautious Policy Remarks
The Australian Dollar (AUD) advanced for a second straight session on Monday, gaining ground against the US Dollar (USD). Markets reacted to cautious comments from Reserve Bank of Australia Deputy Governor Andrew Hauser, who warned that Australia’s economic rebound began with demand already outstripping potential output—“the tightest recovery since the early 1980s”—and emphasized that monetary policy needs to remain restrictive to keep inflation in check.
Hauser pointed out that GDP growth accelerated last year when demand was “slightly” above capacity, leaving little room for rate cuts. His warning reinforced the view that the RBA will hold rates higher for longer.
Additional support for the AUD came from easing Sino-US trade tensions. China’s Ministry of Commerce said it will temporarily lift its ban on exporting certain “dual-use” materials (gallium, germanium, antimony and super-hard materials) to the US. The suspension runs immediately through November 27, 2026. Since China is Australia’s largest trading partner, any improvement there tends to buoy the AUD.
China’s latest price data also surprised on the upside. October’s Consumer Price Index rose 0.2% year-on-year (after a 0.3% drop in September) and 0.2% month-on-month (versus +0.1% prior). Meanwhile, the Producer Price Index improved slightly to a 2.1% annual decline.
US Dollar Holds Near 99.60 on Shutdown Hopes
The US Dollar Index (DXY)—which measures the greenback against six major currencies—was steady around 99.60. Optimism that the US government shutdown may soon end provided underlying support. Senate Majority Leader John Thune reported bipartisan talks have “taken a positive turn,” and on Sunday the Senate moved toward voting on a funding bill to reopen the government. The proposal would fund some agencies through January 30 and award full-year budgets to others, while furloughed employees would receive back pay.
However, weaker US data has capped the dollar’s upside. The University of Michigan’s Consumer Sentiment Index slipped to 50.3 in November—the lowest since June 2022—below the 53.2 consensus. Challenger’s report showed firms cut over 153,000 jobs in October, the largest October layoff tally in over 20 years. On the brighter side, ADP’s private payrolls rose by 42,000, and the ISM Services PMI climbed to 52.4, both topping estimates.
Elsewhere, China’s October trade surplus narrowed to CNY 640.4 billion as exports fell 0.8% year-on-year and imports rose 1.4%. Services PMI eased to 52.6 and manufacturing PMI to 50.6. Back home, Australia reported a wider-than-expected trade surplus of AUD 3.938 billion in September—driven by a 7.9% monthly rise in exports and a 1.1% uptick in imports.
Technical Outlook: Eyes on the 50-Day EMA
On the daily chart, AUD/USD traded around 0.6520, consolidating within a sideways rectangle and holding just above its nine-day Exponential Moving Average (EMA). The next resistance sits at the 50-day EMA near 0.6535; a decisive break there could open the door to the top of the range around 0.6630 and then the September 17 high of 0.6707. On the downside, solid support lies at the 0.6500 psychological mark, followed by 0.6470 (rectangle floor), 0.6414 (August low) and 0.6372 (six-month low).
Today’s Currency Movers
A snapshot of today’s performance shows the AUD as the strongest G10 currency versus the Japanese yen, while it lagged most versus the US dollar. A currency heat map of percentage moves helps illustrate these cross-rate changes across the board.
