FX.co ★ Aussie Dollar Hits 9-Month Low

The Australian dollar slipped below $0.69, its weakest level since late January, as the US dollar strengthened on mounting expectations of further Federal Reserve tightening. Market odds of a 50-basis-point Fed rate hike in December jumped after US inflation for October came in hotter than expected and Fed officials signaled a greater readiness to tighten policy more aggressively.

By contrast, soft domestic data in Australia weighed on the local currency. Weak housing figures, alongside a sharp deterioration in both consumer and business confidence, led traders to largely discount the possibility of another Reserve Bank of Australia rate increase in December. The RBA has already raised interest rates five times this year, lifting the cash rate to an eighteen-year high of 4.85%. Futures markets now imply an 82% probability that rates have peaked, with a 25-basis-point cut fully priced in by the end of 2027.

At the same time, a broad selloff in global equity markets further pressured the risk-sensitive Australian dollar.