The Australian dollar hovered around $0.653 on Wednesday, staying near its weakest levels in three months as the US dollar continued to gain strength, fueled by "Trump trades."
Aussie dollar hovers near three-month low
These trades reflect market bets that Trump’s inflationary policies will constrain the Federal Reserve’s ability to lower borrowing costs. The aussie was also pressured by declines in iron ore, copper, gold, and oil prices, given Australia's status as a net exporter of commodities. Domestically, data showed that wage growth in Australia slowed to a near two-year low of 3.5% in the third quarter, missing forecasts of 3.6%.
Consumer confidence improved
On a more positive note, consumer confidence surged to a two-and-a-half-year high in November, driven by easing concerns over interest rate hikes. Currently, markets do not anticipate a rate cut by the Reserve Bank of Australia in the near term, with the first possible cut expected in mid-2025.
