Australian Dollar Falls 0.31% to $0.6905 as Bets on US Rate Hike Rise
Key Facts
The Australian dollar fell to around $0.6905, down 0.31% on the day, in a reading reported by FXStreet at 12:55 UTC on November 10, after rebounding in the previous session. The report linked pressure on the currency to China’s narrowing trade surplus and rising market bets on a US rate increase in December. China’s data matter for the Australian dollar given the currency’s ties to developments in trade and demand there, while tighter US policy increases the dollar’s appeal. But the pair’s reading when the report was published came before the release of the US consumer price index for October, so that data was not the cause of the move the report tracked. EL7 data recorded the pair’s close at 0.69256 on November 9, a separate daily measure from the trading price cited in the FXStreet report.
In China, the trade surplus narrowed to $105.28 billion in October from $133.53 billion in September, below market expectations of $125.8 billion, according to FXStreet. Chinese exports nevertheless rose 35.2% year over year in October, while imports increased 41.6%, according to The Associated Press. Faster import growth coincided with a smaller surplus than in the previous month, after September exports rose 36.3% and imports 31% year over year. The surplus was $133.5 billion in September, compared with $119.1 billion in August, the news agency reported. From January to October, China recorded a trade surplus of $1.04 trillion. FXStreet cited the smaller-than-expected surplus among the factors that weighed on the Australian currency that day.
On the US side, market-implied odds of a December rate increase rose to about 99% for a 25-basis-point hike, from 84% the previous day, according to CME Group’s FedWatch tool, FXStreet reported. These percentages reflect market pricing of the likelihood of a decision and do not represent an announcement by the Federal Reserve. In a speech delivered before the October inflation data were released, Fed Governor Christopher Waller said he would continue to favor a 25-basis-point increase at the December meeting even if October inflation improved. He added that a core reading of around 0.3% or more, if similar to previous monthly readings, could warrant considering a larger increase. Waller said, "In that case, I think a 50-basis-point increase would be appropriate to consider." The official tied the size of any potential move to inflation data, while a quarter-point increase remained his stated base case.
Waller based his assessment on inflation remaining above the Federal Reserve’s target, citing the September personal consumption expenditures measure. The index rose 0.5% during the month and 3.7% year over year, while the core index increased 0.3% monthly and 3.1% over 12 months. These figures came in the context of his remarks on the inflation path ahead of the October reading; the consumer price index data released later were not available when FXStreet recorded the Australian dollar price. The Bureau of Labor Statistics had scheduled the November consumer price index release for December 10, 2026, at 8:30 a.m. Eastern time. In Australia, the Bureau of Statistics had scheduled the October consumer price index release for November 25, 2026, at 11:30 a.m. Australian Eastern Daylight Time. These dates place the US and Australian inflation readings among the later data releases preceding or accompanying year-end.