FX.co ★ Australian Dollar Hits 15-Month High

On Wednesday, the Australian dollar surged to approximately $0.674, marking its highest value in over fifteen months. This appreciation is largely attributed to escalating geopolitical tensions, which are negatively impacting the US dollar. Meanwhile, investors are keenly anticipating local employment data set to be released this week. The December employment figures are projected to show an increase of around 30,000 jobs, with a slight rise in the unemployment rate to 4.4%. Given the labor market's historical volatility, there is potential for unexpected positive outcomes, which, if realized, could heighten expectations for a rate hike in February. Currently, there is a 27% probability assigned to a 25 basis point hike by the Reserve Bank in February, with this likelihood increasing to 76% by May. Concurrently, the US dollar remains under pressure as investors reduce their stakes in US markets amidst growing tensions with Europe. This follows President Donald Trump's intensified rhetoric concerning Greenland and his threats to levy new tariffs on European countries opposing his strategy. European leaders are currently contemplating potential retaliatory actions.