FX.co ★ Australian Dollar Extends Gain

The Australian dollar appreciated to approximately $0.70 against the US dollar on Monday, continuing its upward trend from the prior week. This movement followed indications from the Reserve Bank of Australia (RBA) of a measured approach to interest rates in the coming year. During an address to the House of Representatives Standing Committee on Economics, RBA Governor Michelle Bullock emphasized the necessity of maintaining stringent interest rates to address persistent inflation throughout the economy. She also pointed out the robustness of the labor market, which complicates the timing for any potential rate reductions. Nonetheless, Governor Bullock underscored that the board was not in haste to alter its restrictive policy stance, with decisions to be informed by forthcoming data. Recent data revealed a surprising 0.4% month-on-month decline in household spending for December 2025. This decrease, the first since March 2024, reflects the ongoing challenges posed by cost-of-living pressures and high interest rates.