The Aussie dollar just won’t quit. Friday marked its sixth day in a row climbing against the US dollar, and the reason’s pretty clear—October’s inflation numbers came in hotter than anyone expected. Prices keep rising, now four months straight, and they’ve blown past the Reserve Bank’s 2–3% comfort zone. Traders see this and figure the RBA isn’t cutting rates anytime soon. Some even expect another hike. That shut down any talk of rate cuts and gave the Aussie Dollar a real boost.
Spotlight on the RBA and Australian Data
Right now, most investors believe the RBA will keep its cash rate at 3.6% in December. Futures suggest that a rate cut is unlikely—only 6%. The data support that. Last month, private sector credit increased by 0.7%, exceeding projections, with yearly growth reaching 7.3%. Add in strong capital spending and solid PMI numbers, and the story is simple: Australia’s economy is holding up. No wonder traders are bullish on the Aussie, at least for the near term.
AUD/USD Gets a Lift as US Dollar Sags
It’s not just local news driving the currency. The AUD/USD pair is riding higher partly because the US Dollar is running out of steam. Right now, markets see an 87% chance the Fed cuts rates in December, with US jobs cooling off and inflation under control. On the charts, AUD/USD is hovering near 0.6540 and looks ready to climb. It’s holding above its nine-day EMA, and bulls have their sights on 0.6580, maybe even that big 0.6600 level. The support is around 0.6500, so as long as the economic mood stays upbeat, the Aussie dollar’s rally seems set to keep rolling.
