AUD/USD Rises at the Start of the Year, Is the RBA Ready to Raise Interest Rates Again?
The AUD/USD currency pair recovered from earlier losses and rose towards 0.6690 in Asian trading on Friday. The Australian dollar gained support as markets began pricing in a possible interest rate hike by the Reserve Bank of Australia (RBA) in early 2026, especially if fourth-quarter inflation data due at the end of January shows higher-than-expected figures.
RBA Governor Michele Bullock previously emphasized that the board remains open to a rate hike if inflation does not ease as expected. The minutes of the December RBA meeting also showed policymakers' readiness to tighten monetary policy if needed, while economic indicators such as the Australian manufacturing PMI remained stable despite slightly slowing growth.
Meanwhile, the AUD also received support from the weakening US dollar. Markets expect the US Federal Reserve to cut interest rates two more times throughout 2026, in contrast to the possibility of a tighter RBA policy. The replacement of the Fed chair by US President Donald Trump in May also added to uncertainty, causing AUD/USD to rise as the two countries' monetary policy directions diverged. (az)
Source: Newsmaker.id
