FX.co ★ Australian Dollar Steady Near 3-Year Peaks

The Australian dollar remained stable around $0.70 on Thursday, hovering near its three-year highs. This strength is attributed to the Reserve Bank’s assertive policy stance and solid trade balance figures. Recent data indicated that Australia's trade surplus expanded to AUD 3.37 billion in December 2025, surpassing both the previous three-month low recorded in November and market expectations slightly. The improvement was primarily due to a surge in exports, particularly in metal ores and minerals, during a robust year-end shipping period, coupled with a decline in imports to a three-month low. Furthermore, the Aussie has received additional support since the central bank executed a 0.25% rate hike to 3.85% in its February meeting, signaling potential for further increments. Market anticipations reflect approximately an 80% likelihood of another rate increase in the May policy meeting and a 50% chance that rates might peak at 4.35% by the end of the year. Meanwhile, the Australian currency surged to a thirty-five-year high against the Japanese yen, while the US dollar displayed broad strength as markets adjusted to a slower anticipated pace of Federal Reserve rate reductions.