Australian Dollar Undermined by Shifting Bets on Rates
By James Glynn
SYDNEY--The Australian dollar fell to its lowest level in over seven months versus the greenback on heightened bets that the U.S. Federal Reserve could raise interest rates further.
The Aussie hit a low of 68.44 U.S. cents in late U.S. trading Tuesday before recovering to around 68.80 U.S. cents.
Much of the focus in currency markets is on comments by Fed Gov. Christopher Waller who said a 50 basis point December hike should be considered if the U.S. CPI comes in around 0.3% in October or higher, which it did.
Financial markets have now priced in 28 basis points of hikes by the Fed in December.
"There no reasons to expect a bounce [in the Australian dollar] just at the moment," said Ray Attrill, head of FX strategy at National Australia Bank.
"Waller has form for speaking his own mind rather than reflecting what the rest of the Fed might think," Attrill added. "But there is clear risk that the Fed has to do more next year."
Money markets are also starting to think that Reserve Bank of Australia could be done raising rates after having increased interest rate five times this year.
In Australia, weak housing data and a significant drop in both consumer and business confidence has traders largely ruling out a further interest rate increase by the RBA in December.
Traders are also watching U.S. stocks, with further weakness likely to undermine the risk-sensitive Australian dollar, Attrill added.
Write to James Glynn at james.glynn@wsj.com
(END) Dow Jones Newswires
November 10, 2026 23:30 ET (04:30 GMT)
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