AUD/USD Forecast and News


AUD/USD consolidates around 0.6250 as focus shifts to RBA minutes

AUD/USD trades in a tight range around 0.6250 with RBA minutes taking centre stage. The RBA held its policy rates steady at 4.25% in the policy meeting on December 10. Investors shrug off soft US monthly PCE inflation data for November.

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AUD/USD Technical Overview

The AUD/USD pair mildly declined to 0.6250 on Monday, snapping a two-day winning streak. The Relative Strength Index (RSI) is at 30, hovering near oversold territory and mildly declining, signaling limited selling pressure. The MACD histogram prints flat red bars, reflecting a lack of strong momentum in either direction.

Immediate support is seen at 0.6220, with further losses potentially exposing the 0.6200 psychological level. On the upside, resistance remains at 0.6280, with a break above this level required to reignite bullish momentum. While the pair’s downside appears contained for now, market focus on the RBA minutes and upcoming US data will likely drive the next significant move.


Fundamental Overview

The AUD/USD trades in a tight range around 0.6250 on Monday, with the focus shifting to the Reserve Bank of Australia (RBA) minutes set to be released on Tuesday. Meanwhile, the RBA’s decision to hold rates steady at its December 10 policy meeting and ongoing speculation about a February rate cut continue to influence sentiment.

The Aussie started the day with mild losses as investors digest the implications of the RBA’s dovish hold during its December meeting. The central bank kept the Official Cash Rate (OCR) unchanged at 4.35%, marking its ninth consecutive meeting without a change. The decision came against a backdrop of weakening Q3 GDP data, which fueled speculation about a rate cut in February.

The RBA minutes highlighted a shift in tone, with policymakers expressing growing confidence that inflation is trending sustainably toward the target. The Board also removed its neutral guidance, which previously stated, “the Board is not ruling anything in or out.” Governor Michele Bullock reiterated the importance of a data-driven approach, stating, “I honestly don’t know if we’re going to be cutting in February.” Market participants currently assign a 65% probability to a 25 basis point rate cut in February, with expectations fully priced in for April.



SPECIAL WEEKLY FORECAST

Interested in weekly AUD/USD forecasts? Our experts make weekly updates forecasting the next possible moves of the Australian Dollar-US Dollar pair. Here you can find the most recent forecast by our market experts:

AUD/USD: Interim top confirmed, 0.7000 at risk

AUD/USD: Interim top confirmed, 0.7000 at risk Premium

The AUD/USD pair kept falling in the last few days, reaching a fresh multi-week low of 0.7263 on Friday, to close the trading week a handful of pips above it. 

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AUD/USD Big Picture

AUD/USD Bullish Themes

AUD/USD Bearish Themes

FXS Signals

Latest Australian Dollar Analysis


Latest AUD Analysis

Editors' picks

EUR/USD struggles to hold above 1.0400 as mood sours

EUR/USD struggles to hold above 1.0400 as mood sours

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GBP/USD set to swoon on holiday-shortened week

GBP/USD set to swoon on holiday-shortened week

GBP/USD waffled near the 1.2550 level on Monday, kicking off the holiday trading week with a third of a percent decline as market sentiment coils. Market volumes are set to drain out of global exchanges as investors broadly hang up their hats for the Christmas holiday, and global markets will be shuttered on Wednesday.

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Japanese Yen retains intraday negative bias amid doubts over BoJ's rate-hike plan

Japanese Yen retains intraday negative bias amid doubts over BoJ's rate-hike plan

The Japanese Yen struggles to capitalize on Friday’s modest recovery gains against the US Dollar. Doubts over BoJ’s rate hike plan and elevated US bond yields weigh on the lower-yielding JPY. Traders now look to the US Consumer Confidence Index for short-term impetus later this Monday. 

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Gold flat lines above $2,600 ahead of holiday trading week

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Gold price trades flat around $2,610 during the early Asian session on Tuesday. Markets face a relatively quiet trading session ahead of the holiday trading week. The US Richmond Fed Manufacturing Index for December is due later on Tuesday. 

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AUD/USD YEARLY FORECAST

How could AUD/USD move this year? Our experts make an AUD/USD update forecasting the possible moves of the Aussie-US Dollar pair during the whole year. Don't miss our 2024 AUD/USD forecast!

AUD/USD FORECAST 2024

The Australian Dollar (AUD) started 2023 on a high note, though slumped closer to its post-pandemic low against the USD during the latter part of the year. The currency clawed back some of its steep declines during the final two months of 2023, and the outlook seems sunnier in the wake of the prevalent bearish sentiment surrounding the Greenback. Read more details about the forecast.

MOST INFLUENTIAL POLITICAL EVENTS IN 2024 FOR AUD/USD

Will the Fed will achieve a soft landing? The current market pricing for a more aggressive policy easing by the central bank next year might have already set the stage for a disappointment and favours the USD bulls. This should allow the USD to resume the prior uptrend witnessed since July 2023 and keep a lid on a runaway rally for the AUD/USD pair.

The upcoming US Presidential election could also play a key role in influencing the USD price dynamics and driving the aussie.


About AUD/USD

AUD/USD, The 'Aussie'

The AUD/USD pair, also called the “Aussie”, tells the trader how many US dollars (the quote currency) are needed to purchase one Australian dollar (the base currency). This currency pair is also known as the "Aussie". Together with the New Zealand Dollar and the Canadian Dollar, the AUD is a commodity currency, that is a currency whose country's exports are largely comprised of raw materials (precious metals, oil, agriculture, etc.).

The interest rates set by the Reserve Bank of Australia (RBA) have been among the highest of industrialized countries and the relatively high liquidity of the AUD has made it an attractive tool for carry traders looking for a currency with the highest yields. These factors made the AUD very popular among currency traders.

AUD/USD CORRELATIONS

Australia is a big exporter to China and its economy and currency reflect any change in the situation in that country. The prevailing view is that the Australian Dollar offers diversification benefits in a portfolio containing the major world currencies because of its greater exposure to Asian economies.

This correlation with the Shanghai stock exchange is to be added to the correlation it has with gold. The pair AUD/USD often rises and falls along with the price of gold. In the financial world, gold is viewed as a safe haven against inflation and it is one of the most traded commodities.

ORGANIZATIONS, PEOPLE AND ECONOMIC DATA THAT INFLUENCE AUD/USD

The AUD/USD news can be seriously affected by the decisions taken by these organizations and people:

  • Reserve Bank of Australia (RBA) that issues statements and decides on the interest rates of the country. Its president is Michele Bullock.
  • Australian Government and its Department of Finance that implement policies that affect the economy of the country.
  • The US Government: events as administration statements, new laws and regulations or fiscal policy can increase or decrease the value of the US Dollar and the currencies traded against it, in this case, the Australian Dollar.
  • Fed, the Federal Reserve of the United States whose president is Jerome Powell. The Fed controls the monetary policy, through active duties such as managing interest rates, setting the reserve requirement, and acting as a lender of last resort to the banking sector during times of bank insolvency or financial crisis.

In terms of economic data, as for most currencies, the AUDUSD traders have to keep an eye on:

  • GDP (Gross Domestic Product), the total market value of all final goods and services produced in a country. It is a gross measure of market activity because it indicates the pace at which a country's economy is growing or decreasing. Generally speaking, a high reading or a better than expected number is seen as positive for the AUD, while a low reading is negative.
  • Inflation measured by key indicators as the CPI (Core Price Index) and the PPI (Production Price Index), which reflect changes in purchasing trends.
  • Current Trade Balance, a balance between exports and imports of total goods and services. A positive value shows trade surplus, while a negative value shows trade deficit. If a steady demand in exchange for AUD exports is seen, that would turn into a positive growth in the trade balance, and that should be positive for the AUD.

Michele Bullock

Michele Bullock is an Australian economist who is currently governor of the Reserve Bank of Australia. She commenced as governor on 18 September 2023, and is the first woman to hold the role. She is Chair of the Reserve Bank Board, Payments System Board and Council of Financial Regulators. Prior to her current role, Ms Bullock was the Deputy Governor of the Reserve Bank of Australia.

Jerome Powell

Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. His term as a member of the Board of Governors will expire January 31, 2028. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.

RBA NEWS & ANALYSIS

FED NEWS & ANALYSIS


ASSETS THAT INFLUENCE AUD/USD THE MOST

  • Currencies: NZD and JPY (New Zealand and Japan are important regional partners of Australia). Other important group of influent pairs includes: EUR/USD, GBP/USD, USD/JPY, USD/CHF, NZD/USD and USD/CAD.
  • Commodities: The most important is Gold, as already explained above, but also Iron Ore and Natural Gas.
  • Bonds: GACGB10 (Australian Government Bonds Generic Yield 10 Year), GNZGB10 (New Zealand Government Bond 10 Year) and T-NOTE 10Y (10 year US Treasury note).
  • Indices: S&P/ASX 200 (stocks of the Australian Securities Exchange), S&P/TSX Global Gold Index (includes producers of gold and related products at the Toronto Stock Exchange).