AUD/USD holds steady under 0.6700 as markets await China’s Trade Balance data

AUD/USD Remains Steady Amid Mixed Economic Signals

The AUD/USD currency pair is maintaining its position near 0.6680 during Wednesday’s Asian trading session, following a slight decline in the previous session. Despite softer inflation data from the United States, the US Dollar (USD) continues to strengthen, suggesting that the Federal Reserve (Fed) might proceed with interest rate cuts as anticipated by market participants.

In December, the US Core Consumer Price Index (CPI)—which excludes food and energy—rose by 0.2%, falling short of analysts’ forecasts. The annual core inflation rate remained at 2.6%, matching its lowest level in four years. This data points to a continued easing of inflation, especially after previous figures were influenced by temporary shutdown effects. Nonetheless, robust Nonfarm Payrolls, a lower unemployment rate, and a strong four-week average for ADP Employment Change highlight ongoing strength in the US labor market.

On the other hand, the Australian Dollar (AUD) could see renewed support if expectations grow for additional rate hikes by the Reserve Bank of Australia (RBA), particularly after a notable recovery in Australia’s Building Permits figures.

In November 2025, seasonally adjusted approvals for new dwellings in Australia jumped by 15.2% month-over-month, reaching 18,406 units—a level not seen in nearly four years and consistent with initial estimates. This surge reversed a 6.1% drop from the previous month and marked the largest monthly increase since May 2023.

The ongoing strength in housing demand may present challenges for the RBA, as it could hinder efforts to bring inflation down and strengthen the case for a tighter monetary policy stance. This comes even as inflation in November showed signs of easing, though it remains above the central bank’s target range.

Market participants are also awaiting China’s December Trade Balance report, given China’s significant trade relationship with Australia. The trade surplus is projected to widen to $113.60 billion, up from $111.68 billion previously. Exports are forecast to grow by 3.0% year-over-year, while imports are expected to rise by 0.9% over the same period.