24.12.202500:59:25UTC+00Australian Dollar Hits 14-Month High

The Australian dollar rose to approximately $0.670, reaching its highest point since the previous October, driven by increasing expectations of interest rate hikes by the Reserve Bank of Australia (RBA). Recent minutes from the RBA's meeting revealed a readiness to tighten monetary policy should inflation not decline as forecasted. This development focuses attention on the impending fourth-quarter Consumer Price Index report scheduled for January 28. Analysts speculate that a stronger-than-expected core inflation rate for Q4 may trigger a rate increase during the RBA's meeting on February 3. Although the central bank is predicted to remain steady with interest rates through 2026, financial markets are factoring in the potential risks of higher yields and policy tightening, currently assigning about a 28% probability to a 25 basis point rate hike. The Australian dollar's value was further bolstered by rising commodity prices, with gold and copper reaching new heights, underscoring Australia's robust export performance. It also appreciated against the yen, attaining a 17-month high, with an overall gain of nearly 7% in this quarter alone.