The Australian dollar’s AUD/USD pair rose 0.3% to its strongest level since October 2024

Most Asian currencies moved in a tight range with the dollar as markets dropped before key U.S. labour data due this week, while the Australian dollar hit a 15-month high as November inflation data reinforced a hawkish outlook for the Reserve Bank.

Currencies maintained course as traders mostly looked past heightened global geopolitical tensions, as a China-Japan feud worsened and as the U.S. proceeded with its takeover of Venezuela.

Focus this week is squarely on a host of key economic readings, from the U.S. and Asia, which are expected to provide more insight on the world’s largest economies.

The Australian dollar’s AUD/USD pair rose 0.3% to its strongest level since October 2024.

Gains in the currency came even after headline consumer price index inflation data read weaker than expected for November, amid softer retail spending and electricity prices.

But underlying inflation fell little from last month, and remained squarely above the RBA’s 2% to 3% annual target.

Wednesday’s print pointed to limited cooling in Australian inflation, and reinforced bets that the RBA will not cut interest rates in the coming months.

ANZ analysts said the RBA was likely to keep rates steady in February, and may even discuss potentially raising rates this year. But their baseline expectation was that rates will remain unchanged at 3.60% until next year.

The dollar index and dollar index futures fell 0.1% apiece in Asian trade, as traders grew cautious towards the dollar before a batch of labour market readings due this week.

Investors will be closely watching nonfarm payrolls data for December, due Friday, for more cues on interest rates. Labour market strength is a major consideration for the U.S. central bank in altering interest rates.

Asian currencies found limited relief from weakness in the dollar, as broader risk appetite remained soft.

The Japanese yen’s USD/JPY pair caught some bids this week amid speculation over more interest rate hikes and currency market intervention by the Bank of Japan.

The Chinese yuan’s USD/CNY pair remained steady at its strongest levels in 2-½ years.

The Singapore dollar’s USD/SGD pair rose 0.1%, while the South Korean won’s USD/KRW and the Taiwan dollar’s USD/TWD were flat.