Aussie dollar's decline far from over

Good morning and welcome back after the holiday break, it's Ainsley here with all the news you need to get your working week rolling.Today's

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Good morning and welcome back after the holiday break, it's Ainsley here with all the news you need to get your working week rolling. Today's must-reads: • Australian dollar to keep falling • Risk of fires after heatwave • Top Australian island resorts to visit

What's happening now

The Australian dollar slid the most in six years in 2024 but its decline looks far from over — there's every prospect it will fall below 60 US cents in coming months. "A slide all the way to 60 cents is conceivable in the risk case where US equities take fright at an unfolding global trade war, China's fiscal counter-stimulus is inadequate, and the RBA is forced to cut quickly to lend support," said Gareth Berry, a foreign-exchange and rates strategist at Macquarie Bank. Authorities issued extreme heat warnings for southeastern and western parts of the country over the weekend, with scorching conditions expected in Sydney today. Officials also flagged the risk of fires in parts of Victoria and South Australia. A large bushfire continues to burn at the scenic Grampians National Park in Victoria's west.  Australia's sovereign wealth fund asked the government to alter the language in a proposed new investment mandate, documents released under a Freedom of Information request showed.  Following aviation's cautious path is the best hope for autonomous driving to become widely adopted, David Fickling writes in Bloomberg Opinion. Silicon Valley likes to move fast and break things — but when the things that could be broken are human bodies, you need to move at a more sedate pace.

What happened overnight

Bond traders are entering the new year with diminished expectations as the resilient US economy and President-elect Donald Trump's tax-cut and tariff policies threaten to keep Treasuries under pressure. The reset has hit longer-dated bonds the hardest, sending the yield on benchmark 10-year Treasuries to nearly 4.6%. Italy is in advanced talks with Elon Musk's SpaceX for a deal to provide secure telecommunications for the nation's government — the largest such project in Europe, people with knowledge of the matter said Sunday.  Meanwhile, Musk appears to have turned on Reform UK party leader Nigel Farage, the right-wing populist and friend of US President-elect Donald Trump he previously supported. "Farage doesn't have what it takes," Musk posted on his social media platform X on Sunday, saying the party "needs a new leader." Congestion pricing has finally arrived in New York City, though its long-term future still remains uncertain. Drivers entering parts of Manhattan will be charged $9 during peak hours in a program following similar initiatives in London, Stockholm and Singapore that aims to reduce the worst traffic in the world. E-ZPass readers and license plate-scanning cameras over Park Avenue in New York on Jan. 3. Photographer: Michael Nagle/Bloomberg

What to watch

All times Sydney • 09:00 a.m.: Dec. S&P Global Australia PMIs

One more thing...

If the heat has you pining for a beach retreat — we're pleased to report that two Australian resorts have made Bloomberg's list of top new island hotels. Rumi on Louth, South Australia and The Sundays, Hamilton Island, Queensland both feature in the rundown designed to deliver on your castaway fantasies. A rendering of the infinity pool and restaurant at the Sundays. Source: The Sundays

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