AUD/USD Forecast and News
AUD/USD edges lower after mixed Chinese data, US Dollar remains stronger
The AUD/USD continues to decline for the second consecutive session, trading around 0.6660. This is largely influenced by recent mixed economic data from China released on Friday. The Aussie dollar had already been under pressure after Australia's employment figures were released on Thursday, which presented a mixed picture.
Latest Australian Dollar News
AUD/USD Technical Overview
Extra gains may cause the AUD/USD to initially try the May high of 0.6714 (May 16) before the December 2023 top of 0.6871 and the July 2023 peak of 0.6894 (July 14), all ahead of the key 0.7000 yardstick.
Meanwhile, occasional bearish attempts could drag spot the interim 100-day and 55-day SMAs of 0.6567 and 0.6548, respectively, before the more significant 200-day SMA of 0.6522, all before dropping to the May low of 0.6465 and the 2024 bottom of 0.6362 (April 19).
Looking at the larger picture, further gains are possible as long as spot continues above the 200-day SMA.
Fundamental Overview
The mild rebound in the US Dollar (USD) sparked some renewed selling bias in broad risky assets, motivating AUD/USD to return to the negative zone after hitting fresh four-month peaks just above the 0.6700 barrier on Thursday.
Additionally, the USD met some fresh buying orders as investors continued to digest the release of US inflation data tracked by the Consumer Price Index (CPI), which indicated a decline in April. This reinforced investors' anticipation of the potential initiation of the Fed's easing programme in the latter half of the year, most likely at the September 18 meeting.
The subdued US CPI figures aligned with Chief Jerome Powell's earlier statements in the week, where he dismissed the possibility of a rate hike and anticipated subdued inflation throughout the year.
Domestically, the Australian dollar ignored the additional advance in copper prices, contrasting with relatively stable iron ore prices. On the docket, the labour market showed mixed feelings after the Unemployment Rate ticked higher to 4.1% and Employment Change increased more than expected by 38.5K individuals in April.
Regarding monetary policy, the Reserve Bank of Australia (RBA) opted to keep its interest rate steady at 4.35% during its May 7 meeting, maintaining a neutral stance and signalling flexibility. The RBA's economic projections foresee elevated inflation rates until Q2 2025, driven by service price inflation, with an eventual return to the 2%–3% target range by late 2025, reaching the midpoint by 2026.
During the subsequent press briefing, Governor Michele Bullock adopted a balanced stance, suggesting potential rate adjustments but without a definitive commitment.
Currently, the swaps market largely discounts the likelihood of further rate hikes in the next six months, with expectations of a decline in the subsequent period.
Furthermore, both the RBA and the Federal Reserve are anticipated to implement easing measures later than many of their G10 counterparts.
Considering the Fed's commitment to monetary policy tightening and the potential for RBA easing later in the year, sustained upward movements in AUD/USD are anticipated to encounter limitations.
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 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.
AUD/USD Big Picture
AUD/USD Bullish Themes
AUD/USD Bearish Themes
Latest AUD Analysis
Editors' picks
EUR/USD drops to near 1.0850, further support at nine-day EMA
EUR/USD continues to lose ground, trading around 1.0860 during the Asian hours on Friday. From a technical perspective on a daily chart, analysis indicates a sideways trend for the pair as it continues to lie within the symmetrical triangle.
GBP/USD posts modest gains above 1.2650, focus on the Fedspeak
The GBP/USD pair posts modest gains near 1.2670 during the Asian session on Friday. Meanwhile, the USD Index recovers some lost ground after retracing to multi-week lows near 104.00 in the previous session.
USD/JPY climbs to near 156.00 as BoJ maintains bond-buying
USD/JPY rose to near 155.90 during the Asian session on Friday as the Japanese Yen encountered renewed pressure. This was sparked by the Bank of Japan maintaining its bond-buying amounts from the previous operation, opting against a surprise cut to debt purchasing earlier in the week.
Gold price loses momentum, with Fed speakers in focus
Gold price trades with a bearish bias on Friday after retreating from the nearly $2,400 barrier. The bullish move of precious metals in the previous sessions was bolstered by the softer-than-expected US inflation data in April, which triggered hope for rate cuts from the US Federal Reserve.
Oil extends the rally near $78.90, US inflation data boosts Fed rate cut expectations
Western Texas Intermediate, the US crude oil benchmark, is trading around $78.90 on Friday. The black gold edges higher amid the recent drop in US crude inventories and the possible interest rate cuts by the Federal Reserve.
Majors
Cryptocurrencies
Signatures
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.
Michele Bullock RBA's Profile and Wikipedia
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.
Jerome Powell Fed's Profile and Wikipedia
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).