Australian Dollar holds gains following PBOC decision
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The Australian Dollar (AUD) holds gains against the US Dollar (USD) on Monday after the People’s Bank of China (PBOC), China’s central bank, announced to leave its Loan Prime Rates (LPRs) unchanged. The one- and five-year LPRs were at 3.00% and 3.50%, respectively. Traders will likely focus on the Reserve Bank of Australia’s (RBA) Meeting Minutes due on Tuesday, for clues on the central bank’s policy outlook and its assessment of inflationary pressures. As of December 18, the ASX 30-Day Interbank Cash Rate Futures February 2026 contract was trading at 96.34, implying a 27% probability of a rate increase to 3.85% at the next RBA Board meeting. US Dollar breaks three-day winning streak despite cautious Fedspeak The US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, is losing ground and trading around 98.60 at the time of writing. Traders await the US Gross Domestic Product Annualized for the third quarter due on Tuesday. Federal Reserve Bank of Cleveland President Beth Hammack said on Sunday that monetary policy is in a good place to pause and assess the effects of 75-basis-point (bps) rate cuts on the economy during the first quarter, per Bloomberg. The Summary of Economic Projections, or so-called “dot plot,” indicated a median expectation of only one additional rate cut in 2026. The CME FedWatch tool shows a 79.0% probability of rates being held at the Fed’s January meeting, up from 75.6% a week earlier. Meanwhile, the likelihood of a 25-basis-point rate cut has fallen to 21.0% from 24.4% a week ago. The US Bureau of Labor Statistics (BLS) released on Thursday that the US Consumer Price Index (CPI) eased to 2.7% in November. This reading came in below the market consensus of 3.1%. Meanwhile, the US core CPI, which excludes volatile…
