AUD AI Market Pulse, Thursday, 12 November 2026
JAFX AI’s read of the news on AUD (Australian dollar), as it stood at the end of the day: read at 23:27 UTC.
Bias: bearish
AUD heavy at 10-month lows, testing 0.6800 as Fed-RBA divergence widens. An 87% December Fed hike is priced against an RBA pause, and the USD sits at 19-month highs.
AUD/USD fell about 0.67% toward 0.6800, a fresh low since January. It slid even though US jobs data came in slightly softer than expected, because hawkish Fed rhetoric lifted the USD to a 19-month high. AUD also underperformed its peers as markets doubt any continuation of the RBA tightening cycle, and risk aversion added to USD safe-haven demand.
The past week
The pair broke below the psychological 0.6900 on Tuesday after hot US October core CPI (+0.3% MoM) and Waller's 50bp warning. It then lost 0.6850 and is now pressing 0.6800 after a head-and-shoulders breakdown. Domestic data offered no support: NAB confidence fell to -15 and conditions to -2, Westpac consumer confidence dropped 2.7% to 78.2, and China's October trade surplus shrank to $105.28B from $133.53B. The RBA's softer guidance after its fifth hike of the year (to 4.85%) capped any rebounds.
The bigger picture
The regime is policy divergence: a re-accelerating Fed hiking cycle with the USD at 19-month highs, versus an RBA signaling a peak at 4.85%. Rising global bond yields are also pressuring Australia's leveraged housing market. Societe Generale prefers AUD rates over the currency and sees room for AUD/USD to fall after its strong run earlier in the year.
Positioning
Both legs of the divergence are well priced: 87% odds of a 25bp December Fed hike, an RBA pause with 2027 cuts, and five straight down days. Further downside needs a fresh catalyst, such as US PPI reviving the 50bp-hike risk Waller flagged, or a break of 0.6800. The asymmetry favors a sharp short-covering bounce if Bullock or the minutes push back on the pause, given consumer inflation expectations stuck at 5.3%.
Scenarios it set out
- US PPI hot, reviving 50bp December Fed hike talk beyond the 87% priced for 25bp USD extends 19-month highs; AUD/USD likely breaks 0.6800 support and the H&S downside leg extends.
- Bullock speech and RBA minutes (Tue 00:00/00:30 GMT) confirm a pause and leave 2027 cuts on the table Largely priced; AUD stays capped and rallies likely fade below 0.6850, keeping pressure on 0.6800.
- Bullock or the minutes flag the 5.3% inflation expectations and keep hikes open Short-covering squeeze from 10-month lows; AUD/USD could retest 0.6850 and the 0.6875 area, with 0.6900 the bigger hurdle.
What it said to watch
- 0.6800 critical support: a daily close below opens a fresh leg lower; holding it sets up consolidation.
- 0.6840-0.6850, the prior support zone now acting as resistance; 0.6900 is the psychological pivot.
- December Fed hike odds (87%) and any shift toward 50bp pricing after US PPI.
- DXY at 19-month highs; USD/JPY near 160 with Japanese verbal intervention, where a JPY intervention could dent broad USD strength.
- Risk sentiment and China data as a secondary AUD driver.
- The Bullock/minutes tone on pause vs. further hikes, against 5.3% inflation expectations.
Risk ahead, as it saw it
US PPI is due before the weekend (time not specified). In Australia: RBA Governor Bullock speaks Tue 17 Nov 00:00 GMT and the RBA Minutes follow at 00:30 GMT (both high impact). Then come Wage Price Index Wed 18 Nov 00:30 GMT and Employment Change plus Unemployment Rate Thu 19 Nov 00:30 GMT (high impact). No forecasts are published yet for any of these.