The Australian dollar remained under pressure as the US dollar strengthened on renewed geopolitical tensions.
Weakness followed China’s RatingDog Services PMI slipping to 52.0 in December from 52.1, raising concerns over demand.
Analysts noted the Australian currency remains sensitive to Chinese data due to strong trade links between the two economies.
The AUD found some support from growing expectations of interest rate hikes by the Reserve Bank of Australia.
RBA Governor Michele Bullock said policymakers discussed conditions that could require higher rates in 2026.
Traders are focused on Australia’s fourth-quarter CPI data due on January 28 for clues on a possible February rate hike.
The US dollar rose on safe-haven demand after the US captured Venezuelan President Nicolas Maduro.
The US will administer Venezuela until a safe, orderly and judicious transition is achieved.
Donald Trump said.
Trump also warned of potential further action involving Colombia, Mexico and Cuba, adding to global uncertainty.
The US Dollar Index climbed toward 98.60 as investors shifted away from risk-sensitive currencies.
Markets continue to price in further US rate cuts in 2026 amid expectations of a new Federal Reserve chair nomination.