AUD/USD rallies further to near 0.6680 RBA discusses need of interest rate hikes

Australian Dollar Price Today

The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the US Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.24%	-0.38%	-0.62%	-0.19%	-0.44%	-0.63%	-0.40%
EUR	0.24%		-0.14%	-0.39%	0.06%	-0.20%	-0.41%	-0.16%
GBP	0.38%	0.14%		-0.23%	0.20%	-0.06%	-0.28%	-0.01%
JPY	0.62%	0.39%	0.23%		0.43%	0.20%	-0.04%	0.24%
CAD	0.19%	-0.06%	-0.20%	-0.43%		-0.24%	-0.45%	-0.20%
AUD	0.44%	0.20%	0.06%	-0.20%	0.24%		-0.19%	0.05%
NZD	0.63%	0.41%	0.28%	0.04%	0.45%	0.19%		0.24%
CHF	0.40%	0.16%	0.01%	-0.24%	0.20%	-0.05%	-0.24%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

The RBA minutes showed that policymakers discussed raising interest rates in 2026, citing higher inflation risks. “Discussed whether a rate increase might be needed at some point in 2026, as recent data indicated risks to inflation have increased to the upside,” RBA minutes showed.

Comments from RBA minutes pointing to the need to tighten the monetary policy have prompted hawkish expectations. According to a report from Reuters, swaps now imply just a 27% probability of a rate hike from the RBA in February, but a move has been fully priced by June next year. There is a 56% probability of a follow-up move by the end of 2026.

Meanwhile, the continued underperformance of the US Dollar has also strengthened the Aussie pair. During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.16% lower to near 98.00. The DXY is not very far from revisiting the 11-week low of 97.87 posted last week.

Fed's dovish expectations for 2026 are a key contributor to weakness in the US Dollar. According to the CME FedWatch tool, there is a 73.8% chance that the Fed will reduce interest rates by at least 50 bps next year.

In Tuesday’s session, investors will focus on the preliminary United States (US) Gross Domestic Product (GDP) data, which will be published at 13:30 GMT.

Economic Indicator

Gross Domestic Product Annualized

The real Gross Domestic Product (GDP) Annualized, released quarterly by the US Bureau of Economic Analysis, measures the value of the final goods and services produced in the United States in a given period of time. Changes in GDP are the most popular indicator of the nation’s overall economic health. The data is expressed at an annualized rate, which means that the rate has been adjusted to reflect the amount GDP would have changed over a year’s time, had it continued to grow at that specific rate. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.

Why it matters to traders?

The US Bureau of Economic Analysis (BEA) releases the Gross Domestic Product (GDP) growth on an annualized basis for each quarter. After publishing the first estimate, the BEA revises the data two more times, with the third release representing the final reading. Usually, the first estimate is the main market mover and a positive surprise is seen as a USD-positive development while a disappointing print is likely to weigh on the greenback. Market participants usually dismiss the second and third releases as they are generally not significant enough to meaningfully alter the growth picture.