AUD/USD slips toward 0.6670 as the Australian Dollar softens amid negative market sentiment

AUD/USD Slides Amid Global Risk Aversion

The AUD/USD currency pair has declined by 0.26%, trading close to 0.6670 in Monday’s European session. The Australian Dollar is lagging behind other major currencies as investors adopt a more cautious approach in the markets.

Risk sentiment has soured following recent actions by the United States, including the apprehension of Venezuelan President Nicolas Maduro on drug-related allegations. Additionally, President Donald Trump has issued warnings of potential operations in Colombia and Iran, further unsettling global markets.

This heightened uncertainty has prompted traders to seek safety in the US Dollar, driving the US Dollar Index (DXY) to a peak not seen in over three weeks, reaching 98.80.

Domestically, attention will turn to Australia’s November Consumer Price Index (CPI) figures, which are expected to play a key role in shaping expectations for the Reserve Bank of Australia’s (RBA) future policy decisions. During its final 2025 meeting, the RBA indicated that further rate hikes could be considered if inflation remains stubbornly high.

Looking ahead, the main event for the US Dollar this week will be the release of December’s Nonfarm Payrolls (NFP) data on Friday.

On Monday, market participants will also be watching for the US ISM Manufacturing PMI report for December, scheduled for release at 15:00 GMT. Forecasts suggest a slight uptick to 48.3 from November’s 48.2, indicating that manufacturing activity continues to contract, though at a marginally slower rate.