Australian Dollar Rises 0.3% After Falling to Its Lowest Since March
Key Facts
The Australian dollar rose 0.3% to $0.6875 on Monday, after falling more than 1% on Friday to $0.6855, its lowest level since 31 March, according to a Reuters report. The recovery followed a sell-off that ended the week with the currency under pressure, while the US dollar remained near a seven-month high against its Australian counterpart. Reuters linked the US currency’s rise on Friday to strong US jobs data that bolstered bets on interest-rate increases. For the week ended 6 November, the Nasdaq-100 fell 5%, after dropping 6% on Thursday. The Nasdaq Economic Institute said the technology-stock sell-off was linked to concerns about the artificial intelligence trade.
In Australia, the Reserve Bank of Australia raised its cash rate target by 25 basis points to 4.85% on 3 November. Governor Michele Bullock said the tightening was aimed at domestic capacity pressures, explaining that the bank was not raising rates because of the direct impact of oil prices on inflation. She added: "Monetary policy tightening is aimed at domestic capacity pressures." The bank had said inflation remained elevated and was expected to stay above 3% over the coming year, with the risk of high inflation expectations becoming entrenched increasing. Australian Bureau of Statistics data show the consumer price index rose 4.3% in the 12 months to September, compared with 4.0% to August, while trimmed-mean underlying inflation was 3.6% in September.
The currency came under pressure as oil prices and technology shares fell during the week. The Nasdaq Economic Institute said US crude prices fell $10 a barrel to $90 in the week ended 6 November. In separate data, the Australian Competition and Consumer Commission reported that the weekly average Brent price was $114 a barrel in the week ended 4 November, down $16 from the previous week. The Nasdaq report linked the decline in crude to signs of US-Iran diplomacy and possible congressional pressure to cut spending. The institute also reported that Democrats won control of both houses of Congress after the midterm elections, while linking the technology sell-off to concerns about the artificial intelligence trade.
In the United States, nonfarm payrolls increased by 165,000 in October, and the unemployment rate held at 4.1%, according to the Bureau of Labor Statistics. The data supported the US dollar, Reuters said, after bolstering expectations of interest-rate increases. The US jobs report for November is scheduled for release on 4 December. In Australia, the Reserve Bank forecast headline inflation to peak at 4.5% in the December quarter of 2026, then reach the midpoint of its 2–3% target range later than it had expected in August. The bank’s inflation outlook keeps domestic price pressures at the centre of monetary policy decisions, alongside divergent moves in the Australian and US dollars.
The Reserve Bank of Australia’s calendar includes a speech by Assistant Governor Sarah Hunter on 9 November at 9:30 a.m. AEDT on the impact of artificial intelligence on the economy. Minutes of the November Monetary Policy Board meeting are due to be published on 17 November at 11:30 a.m. AEDT. The board will hold its next meeting on 7 and 8 December, with the monetary policy decision due on 8 December at 2:30 p.m. AEDT. The US Energy Information Administration’s weekly oil report is scheduled for release on 12 November, after being delayed from its usual date because of a government holiday. These dates will bring new policy and price data and statements in the coming weeks.