AUD/USD firms on US dollar decline as traders eye inflation data
ITF Team3 min read
AUD/USD jumps 0.75% to around 0.6915 on 11/9/2026 as the US dollar slides and markets price an 80% chance of a Fed hike in December.
Key takeaways
- AUD/USD rose 0.75% to about 0.6915 on 11/9/2026.
- The US Dollar Index fell 0.44% to 101.85, reflecting broad‑based weakness.
- CME FedWatch shows an 80% probability of a 25‑bp Fed hike at the December meeting.
- China’s October CPI slowed to 0.7% YoY, below the 0.8% forecast.
The Australian dollar surged on Monday, gaining roughly 0.75% to trade near 0.6915 against the US dollar. The move came as the greenback weakened across the board, allowing AUD/USD to extend its rebound despite mixed Chinese inflation data and rising expectations of tighter US monetary policy.
Broad US dollar weakness fuels Aussie gains
The US Dollar Index (DXY) slipped 0.44% on 11/9/2026, settling around 101.85. The decline was driven by profit‑taking after a strong US jobs report and by easing geopolitical tensions that reduced demand for safe‑haven dollars. With the greenback under pressure, risk‑on currencies such as the Australian dollar found support, pushing the pair back toward the 0.6900 level.
Traders are now watching the upcoming US inflation releases. The CME FedWatch tool indicates an almost 80% probability of a 25‑basis‑point rate hike at the December Federal Reserve meeting, reflecting confidence that the US economy can sustain tighter policy without derailing growth.
China’s mixed inflation picture and its impact on the Aussie
China, Australia’s top trading partner, reported a 0.7% year‑on‑year rise in consumer prices for October, down from 0.9% in September and missing the 0.8% market expectation. On a month‑to‑month basis, prices were flat after a 0.2% rise in September, matching forecasts. Conversely, the producer price index accelerated to 5.7% YoY, above the 5.3% consensus and the September figure of 5.0%.
The divergence between consumer‑price moderation and stronger producer‑price inflation paints a nuanced view of China’s demand side. While weaker CPI reduces concerns about a slowdown that could hurt Australian exports, the hotter PPI suggests lingering cost pressures that may keep Chinese demand for commodities, a key driver of the Aussie, relatively resilient.
Read also: GBP/USD reclaims 1.3400 as Iran war fears ease
US labour data reinforces rate‑hike expectations
US non‑farm payrolls surged by 165,000 in October, far exceeding the 65,000 forecast and reversing a modest 60,000 gain in September. The unemployment rate fell to 4.1% from an expected 4.2%, underscoring a still‑tight labour market. These numbers have bolstered expectations that the Fed will raise rates in December, even as the dollar weakens on other fronts.
Higher US rates typically support the greenback, but the current dollar decline suggests that market participants are balancing strong labour data against concerns over slower global growth and geopolitical calm, which together have muted the dollar’s rally.
Geopolitical backdrop and commodity links
President Donald Trump downplayed the risk of renewed strikes against Iran, while Qatar’s prime minister met US officials to discuss ending the regional conflict. The de‑escalation helped calm energy markets, with West Texas Intermediate crude falling more than 3% to around $86.85 per barrel.
Lower oil prices can reduce Australia’s terms of trade, but the broader risk‑off sentiment has been limited, allowing the AUD to retain its gains. The pair’s resilience also reflects the Australian dollar’s relative strength against the Swiss franc, as shown in the day's percentage‑change table.
What to watch next
Traders will focus on the US Consumer Price Index due on Tuesday, followed by the Producer Price Index on Friday. A surprise on either front could shift the market’s view of the Fed’s December decision and reignite dollar strength, which would likely pressure AUD/USD back toward 0.6850.
Key technical levels to monitor include support at 0.6880 and resistance near 0.6950. A break above the latter could open the path toward the 0.7000 psychological barrier, while a dip below 0.6880 may invite further declines toward 0.6820.
- US CPI release – Tuesday, 11/13/2026
- US PPI release – Friday, 11/15/2026
- Australian CPI – due later in November
- RBA policy meeting – early December
Frequently asked questions
Why did AUD/USD rise on 11/9/2026?
The Australian dollar climbed 0.75% to about 0.6915 because the US dollar fell 0.44% to 101.85, driven by profit‑taking after strong US jobs data and easing geopolitical tensions. The broader risk‑on mood helped the Aussie despite mixed Chinese inflation numbers.
How do China’s October CPI and PPI affect the Australian dollar?
China’s CPI slowed to 0.7% YoY, below expectations, suggesting weaker consumer demand that could dampen Australian exports. However, a higher PPI of 5.7% YoY indicates persistent production‑level inflation, hinting that commodity demand may stay firm, which supports the AUD.
What US data could change the AUD/USD direction after Monday?
The upcoming US CPI report on 11/13/2026 and the PPI report on 11/15/2026 are crucial. Stronger‑than‑expected inflation could lift the dollar and push AUD/USD lower, while softer numbers may keep the greenback weak and allow the Aussie to test higher levels.
Official data sources
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This article is compiled from international market news for information only. It is not investment advice.