Australian Dollar Drops to Two-Week Low Amid Decline in US Stock Markets

Written by Emily J. Thompson, Senior Investment Analyst

Source: InvestingliveForex

Updated: Dec 17 2025

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Source: InvestingliveForex

Market Sentiment: Risk appetite in the stock market is declining, particularly among leading tech stocks, potentially due to year-end profit taking and reassessments around AI developments, especially with Google's Gemini 3.0 release.
AUD/USD Trends: The AUD/USD currency pair is reflecting risk-on/risk-off sentiments, with the Australian dollar recently rising from 0.6420 to 0.6680, while consolidating in the 0.64-0.67 range since May, influenced by global and domestic growth signals.
Inflation and Interest Rates: Resilient Australian inflation has led the Reserve Bank of Australia to halt rate hike discussions, with market expectations leaning towards potential rate hikes in the second half of next year, which could support the Australian dollar if the U.S. Federal Reserve adopts a dovish stance.
China's Economic Impact: Weak retail sales and housing data in China pose risks for the Australian dollar, as sluggish consumer spending may dampen demand for Australian exports, compounded by uncertainties surrounding the U.S.-China trade relationship.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.