The Australian dollar weakened to around $0.69 per dollar on Monday, trimming gains from the previous week as a firmer US dollar weighed on the currency. The greenback strengthened following President Donald Trump’s nomination of Kevin Warsh as the next Fed chairman. Markets view Warsh as a more hawkish candidate, expected to favor lower interest rates.

However, the Aussie’s decline was partially offset by expectations of a rate hike from the Reserve Bank of Australia. Investors widely anticipate that the central bank will raise the cash rate by 25 bps to 3.85% on Tuesday, marking the first increase in over two years in a bid to rein in persistent inflation. On the economic front, Australia’s Monthly Inflation Gauge rose 0.2% in January 2026, slowing from December’s 1% and marking the slowest pace since August 2025. Meanwhile, ANZ-Indeed Job Ads jumped 4.4% month-on-month in December, the first increase since July and the strongest monthly gain since February 2022.

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