News Maker 23

The Australian dollar strengthened against the US dollar during Asian trading on Monday (November 9, 2026), following two consecutive sessions of decline. The AUD/USD pair hovered around the 0.6890 level, bolstered by a weakening US dollar and investor reactions to China’s inflation report. As one of Australia’s largest trading partners, China’s economic developments significantly influence the Australian dollar, particularly through demand for commodities and the trade outlook between the two nations.

Recent data indicates that China’s consumer inflation rose by 0.7% year-on-year in October—a slowdown from 0.9% in September and below the market forecast of 0.8%. On a monthly basis, the Consumer Price Index (CPI) remained unchanged, following a 0.2% increase in the previous period. Meanwhile, the Producer Price Index (PPI) climbed to 5.7% year-on-year, surpassing both the 5.0% figure from September and the market expectation of 5.3%. This divergence suggests that production cost pressures remain on the rise, while consumer demand in China stays relatively constrained. This situation is of concern to Australia, as a slowdown in Chinese demand could potentially impact its commodity exports.

Conversely, the weakening US dollar has supported a recovery in the AUD/USD pair, even as expectations for a Federal Reserve (The Fed) interest rate hike remain high. Market participants estimate an 80% probability of a 25-basis-point rate hike at the Federal Open Market Committee (FOMC) meeting scheduled for December 8–9. However, growing uncertainty in global financial markets has prompted investors to re-evaluate the trajectory of US monetary policy. A decline in US government bond yields has further dampened the appeal of the dollar, creating room for other major currencies—including the Australian dollar—to strengthen. Meanwhile, the US Non-Farm Payrolls (NFP) report for October showed an addition of 165,000 jobs—well above the market forecast of 65,000 and an increase from 60,000 in September. The unemployment rate also fell to 4.1%, performing better than the 4.2% forecast. These data reflect the resilience of the US labor market and could potentially reinforce expectations for a tighter monetary policy. Investors are now awaiting the US Consumer Price Index (CPI) report on Tuesday (November 10) and the Producer Price Index (PPI) on Friday (November 13), both of which will provide further clues regarding the direction of Federal Reserve interest rates.

The Australian dollar’s strengthening toward the 0.6890 level signals a recovery following selling pressure in previous sessions. However, a slowdown in China’s consumer inflation suggests that the recovery in the country’s domestic demand still faces challenges, which could potentially limit the Aussie’s gains. Should the US dollar continue to weaken and sentiment toward the Chinese economy improve, the AUD/USD pair may retest the psychological 0.6900 level. Conversely, if US inflation data comes in higher than expected—strengthening expectations for Federal Reserve interest rate hikes—the Australian dollar risks falling back toward the 0.6850 area. Ultimately, economic developments in China and US monetary policy will be the primary factors determining the direction of the AUD/USD pair in the near term.