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2025-12-03 13:49:55
[Australian Dollar Rises to Over One-Month High, Yield Spread Supports Currency Strength] 1. On Wednesday in Asian trading, the Australian dollar continued its upward trend against the US dollar, reaching a high of 0.6583, a new high since October 30, with a gain of approximately 0.3%. The next target is 0.6617 US dollars. Although Australia's third-quarter GDP grew by 0.4% quarter-on-quarter, lower than the market expectation of 0.7%, strong domestic demand growth of 1.2% during the quarter and a nominal growth rate of 5.4% for the whole year indicate that the economic fundamentals remain resilient. At the same time, inflation indicators remained high, further strengthening market expectations that the Reserve Bank of Australia will maintain its tight monetary policy. 2. The Australian dollar also performed strongly against the Japanese yen, rising to 102.50 at one point, a 16-month high. 3. Regarding monetary policy, the market expects the Reserve Bank of Australia to keep interest rates unchanged at 3.60% at its meeting next week and continue to emphasize inflation risks. The interest rate futures market has largely ruled out the possibility of further rate cuts and has begun to anticipate a possible rate hike at the end of 2026. This hawkish outlook pushed the yield on Australian 10-year government bonds up 20 basis points in the short term to 4.65%, a new 11-month high, widening the spread with US Treasuries to 53 basis points, the highest level since August 2022. Based on its positive outlook for Australian dollar assets, JPMorgan Chase recommends that investors holding US dollar assets increase their allocation to Australia, and expects the Australian dollar to trade in the US dollar range of 0.6600-0.7000 USD over the next 12 months.
