The AUD/USD pair jumps to close 0.6717 through the European buying and selling session on Wednesday, the best degree seen in over a yr. The Aussie pair strengthens because the Australian Greenback (AUD) outperforms its friends amid expectations that the Reserve Financial institution of Australia (RBA) may elevate rates of interest in 2026 to include accelerating inflationary pressures.
RBA hawkish expectations have been prompted after the discharge of the minutes of the financial coverage on Tuesday, which was introduced on December 9, the place they mentioned elevating rates of interest subsequent yr. “Mentioned whether or not a fee enhance could be wanted sooner or later in 2026, as latest knowledge indicated dangers to inflation have elevated to the upside,” RBA minutes confirmed.
In line with a report from Reuters, swaps now indicate only a 27% chance of a fee hike from the RBA in February, however a transfer has been absolutely priced by June subsequent yr. There’s a 56% chance of a follow-up transfer by the tip of 2026.
In the meantime, a pointy decline within the US Greenback (USD) resulting from agency expectations that the Federal Reserve (Fed) will lower rates of interest by a minimum of 50 foundation factors (bps) in 2026 has additionally strengthened the Aussie pair. In the course of the day, the US Greenback Index (DXY), which tracks the Buck’s worth in opposition to six main currencies, posts a recent 11-week low at 97.75.
AUD/USD technical evaluation
AUD/USD trades considerably greater above 0.6700 on Wednesday. The pair holds above the rising 20-week Exponential Shifting Common (EMA) at 0.6561, preserving the short-term uptrend intact and favoring greater lows.
The 14-day Relative Energy Index (RSI) at 60.93 (above midline) confirms optimistic momentum. Whereas value stays over the typical, pullbacks would stay contained, and the bias would keep bullish.
Pattern situations stay agency because the 20-week EMA continues to slope upward, with assist aligned in an EMA band at 0.6561–0.6546. RSI is but to succeed in overbought, leaving room for extension earlier than 70. A weekly shut above the spherical degree of 0.6700 would open the door for additional upside in direction of the October 7 excessive of 0.6810.
(The technical evaluation of this story was written with the assistance of an AI instrument.)
Financial Indicator
RBA Assembly Minutes
The minutes of the Reserve Financial institution of Australia conferences are printed two weeks after the rate of interest determination. The minutes give a full account of the coverage dialogue, together with variations of view. Additionally they report the votes of the person members of the Committee. Typically talking, if the RBA is hawkish concerning the inflationary outlook for the financial system, then the markets see a better chance of a fee enhance, and that’s optimistic for the AUD.
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