AUD/USD Forecast and News


Australian Dollar remains stronger as US Dollar weakens ahead of CPI data

The Australian Dollar gains ground against the US Dollar on Tuesday, following China’s economic data. In Australia’s close trading partner, China, the economy expanded at an annual rate of 5.2% in the second quarter, compared to a 5.4% growth in the first quarter and the expected 5.1% growth.

Latest Australian Dollar News


AUD/USD Technical Overview

The AUD/USD pair is trading around 0.6555 on Tuesday. The daily chart’s technical analysis indicated a persistent bullish sentiment as the pair is positioned within the ascending channel pattern. The 14-day Relative Strength Index (RSI) remains slightly above the 50 mark, strengthening the bullish bias. However, the pair is hovering around the nine-day Exponential Moving Average (EMA), indicating that short-term price momentum is neutral.

On the upside, the AUD/USD pair could approach the eight-month high of 0.6595, which was reached on July 11. A break above this level could strengthen the bullish bias and support the pair to explore the region around the upper boundary of the ascending channel around 0.6690.

The AUD/USD pair is testing its immediate support at the nine-day EMA of 0.6551, followed by the ascending channel’s lower boundary around 0.6520. A break below this channel would weaken the short-term price momentum and put downward pressure on the pair to navigate the area around the 50-day EMA at 0.6488, aligned with the three-week low at 0.6485.


Fundamental Overview

The Chinese Gross Domestic Product (GDP) rate rose 1.1% in Q2, against the market consensus of a 0.9% increase. Moreover, Retail Sales increased by 4.8% YoY in June, against the 5.6% expected and 6.4% prior, while Industrial Production came in at 6.8%, against the 5.6% expected.

The National Bureau of Statistics (NBS) shared its economic outlook during its press conference, stating that overall economic performance in the first half of the year was stable, with steady progress. However, it emphasized the need to improve investment structure and, environment. It also added that the real estate market is heading towards stabilization.

The AUD/USD pair may face challenges as the US Dollar may regain its ground amid renewed geopolitical concerns. US President Donald Trump has threatened to impose “very severe” tariffs on Russia if no peace deal is reached within 50 days. Trump also warned of secondary tariffs on countries importing Russian Oil.

Australia’s Westpac Consumer Confidence climbed 0.6% month-over-month in July, following a 0.5% gain in June. Although the mood lifted slightly, the latest outcome underscored clear disappointment after the Reserve Bank of Australia (RBA) unexpectedly kept rates unchanged at its July meeting.

The RBA may maintain the interest rates at its next August meeting to get inflation on track to sustainably return to the 2-2.5% target. RBA Governor Michele Bullock stated that inflation risks persist, citing the elevated unit labor costs and weak productivity as factors that could drive inflation above current projections. Meanwhile, RBA Deputy Governor Andrew Hauser highlighted growing global economic uncertainty and warned that the impact of tariffs on the world economy could be significant.

Australian Dollar edges higher as US Dollar holds losses ahead of CPI data

The US Dollar Index (DXY), which measures the value of the US Dollar against six major currencies, is holding losses at around 98.10 at the time of writing. Investors are likely awaiting June's Consumer Price Index (CPI) data on Tuesday to gain fresh impetus over the Federal Reserve’s (Fed) monetary outlook.

President Trump, alongside NATO Secretary-General Mark Rutte, confirmed that European allies will purchase billions of dollars’ worth of American-made weapons, such as Patriot missile systems. These weapons will be transferred to Ukraine in the coming weeks to tackle intensified Russian attacks.

The US government immediately imposed a 17% duty on Monday on most imports of fresh tomatoes from Mexico after negotiations ended without an agreement to avert the tariff. Trump announced, on Saturday, a 30% tariff on imports from the European Union (EU) and Mexico starting August 1. He also proposed a blanket tariff rate of 15%-20% on other trading partners, an increase from the current 10% baseline rate. In response, the European Union announced on Sunday that it will extend its pause on retaliatory measures against US tariffs until early August, in hopes of reaching a negotiated agreement.

Chicago Fed President Austan Goolsbee stated that ongoing trade policy at the hands of Trump's constant tariff threats could hamper the ability of the Fed to deliver rate reductions that both the broader market and Trump himself want to see.

The US government posted a $27 billion budget surplus in June, fueled by a surge in customs duties revenue, which reached a record $27.2 billion. This jump in tariff collections, largely stemming from policies introduced during the Trump administration, contributed to a 13% increase in total budget receipts, which rose to $526 billion. Meanwhile, federal spending declined by 7% to $499 billion.

The Federal Open Market Committee (FOMC) Minutes from the June 17–18 meeting, released last week, indicated that policymakers largely maintained a wait-and-see stance regarding future interest rate decisions.

China's Trade Balance arrived at CNY585.96 billion for June, narrowing from the previous figure of CNY743.56 billion. Chinese Exports climbed 7.2% year-over-year in June, following 6.3% in April. Meanwhile, imports increased 2.3% YoY in the same period, recovering from a previous decline of 2.1%.

A Chinese customs spokesperson said that China’s Exports will continue to forge ahead in the next stage despite challenges. It is important to note that Chinese economic data could impact the AUD, as China is a major trading partner of Australia.

Chinese President Xi Jinping is expected to meet Australia’s Prime Minister Anthony Albanese on Tuesday in Beijing to discuss trade and security amid global trade turmoil and pressure from the US over security commitments to Taiwan, per the Financial Times.

The Reuters survey poll showed that 30 analysts forecasted the Reserve Bank of Australia to cut the cash rate by 25 basis points to 3.60% in August. Australia’s four major banks, ANZ, CBA, NAB, and Westpac, also support the rate cut.

Australian Treasurer Jim Chalmers said that the Reserve Bank of Australia’s decision to hold rates was neither the outcome millions of Australians had hoped for nor what markets had anticipated. Chalmers added that the central bank has signaled a clear direction on inflation and interest rates moving forward.


FXS Signals

Latest Australian Dollar Analysis


Latest AUD Analysis

Editors' picks

EUR/USD closes in on 1.1700 as US CPI data takes center stage

EUR/USD closes in on 1.1700 as US CPI data takes center stage

EUR/USD extends gains to near 1.1700 in the European session on Tuesday. The pair draws support from a broad US Dollar retreat as traders refrain from placing fresh bets on the Greenback ahead of the US CPI inflation data. Upbeat German ZEW Survey and Eurozone industrial data also aid the pair's uptick. 

GBP/USD recovers to 1.3450, awaits US CPI for fresh impetus

GBP/USD recovers to 1.3450, awaits US CPI for fresh impetus

GBP/USD is on a gradual recovery from three-week lows, testing 1.3450 in Tuesday's European trading. A cautiously optimistic market mood combined with a broadly weaker US Dollar underpins the pair ahead of the critical US CPI data and BoE Governor Bailey's speech. 

Japanese Yen hangs near multi-week low against USD as traders keenly await US CPI report

Japanese Yen hangs near multi-week low against USD as traders keenly await US CPI report

The Japanese Yen languishes near a three-week low against a softer US Dollar heading into the European session and seems vulnerable to prolonging the monthly downtrend. The growing market conviction that the BoJ will keep interest rates low for longer than it wants amid concerns about the economic fallout from higher US tariffs turns out to be a key factor undermining the JPY.

Gold price retains intraday positive bias; remains close to multi-week top ahead of US CPI

Gold price retains intraday positive bias; remains close to multi-week top ahead of US CPI

Gold price sticks to modest intraday gains around the $3,360 region heading into the European session and remains close to a three-week high touched the previous day. The US Dollar eases from a multi-week top amid some repositioning trade ahead of the crucial US consumer inflation figures, which is seen as a key factor acting as a tailwind for the commodity.

WTI tests 50-day EMA support near $65.50

WTI tests 50-day EMA support near $65.50

West Texas Intermediate (WTI) Oil price extends its losses for the second successive session, trading around $65.80 per barrel during the European hours on Tuesday. The technical analysis of the daily chart suggests the price of the precious metal remains within a rectangular pattern, indicating a consolidation phase.

Majors

Cryptocurrencies

Signatures


AUD/USD YEARLY FORECAST

What would happen to the AUD/USD this year? A brief update from our experts on where the AUD/USD can go in the upcoming months.

AUD/USD FORECAST 2025

The battle between the Australian Dollar (AUD) and the US Dollar (USD) will be one worth watching in 2025, with central banks stealing the limelight. The Reserve Bank of Australia (RBA) has kept interest rates at record highs whilst most of its overseas counterparts started the loosening process. The US Federal Reserve (Fed), on the other hand, has trimmed the benchmark interest rate by 100 bps through 2024 and aims to slow the pace of cuts in 2025. The central banks’ imbalance aims for record lows in AUD/USD.

MOST INFLUENTIAL POLITICAL EVENTS IN 2025 FOR AUD/USD

Beyond central banks, market players will be attentive to tariffs. The second coming of Donald Trump to the White House anticipates a global Trade War that could fuel inflationary pressures not only in the United States, but also in all major economies.

Given Trump’s personal battle with China, the Australian economy could end up benefiting from fresh commercial interactions with its neighbour giant.


About AUD/USD

AUD/USD

The AUD/USD currency pair, commonly known as the “Aussie”, represents how many US dollars (the quote currency) are needed to purchase one Australian dollar (the base currency). Alongside the New Zealand Dollar (NZD) and the Canadian Dollar (CAD), the AUD is considered a commodity currency due to Australia’s significant exports of raw materials such as precious metals, Oil, and agricultural products.

The Reserve Bank of Australia (RBA) has historically maintained higher interest rates compared to other industrialized nations. Combined with the relatively high liquidity of the AUD, this has made the AUD attractive for carry traders looking for higher yields.

Australia’s economy and currency are closely tied to China, its largest trading partner. Any changes in the Chinese economy can significantly impact the AUD. Additionally, the Australian Dollar is often seen as a diversification tool due to its exposure to Asian economies.

The pair AUD/USD also correlates with Gold prices. Gold is widely viewed as a safe haven asset against inflation and it is one of the most traded commodities.

INFLUENTIAL ORGANIZATIONS AND PEOPLE FOR THE AUD/USD

Reserve Bank of Australia (RBA)

The Reserve Bank of Australia (RBA) is Australia's central bank, deriving its functions and powers from the Reserve Bank Act 1959. Its primary duty is to contribute to currency stability, full employment and the economic prosperity and welfare of the Australian people. The RBA achieves this by setting the cash rate to meet a medium-term inflation target of between 2% and 3%, maintaining a strong financial system and efficient payment infrastructure and issuing the nation's banknotes.

Decisions are made by a board of governors at eight meetings a year and ad hoc emergency meetings as required.

The RBA provides banking services to the Australian Government, its agencies and several overseas central banks and official institutions. Additionally, it manages Australia's gold and foreign exchange reserves.

The Federal Reserve (Fed)

The Federal Reserve (Fed) is the central bank of the United States (US) and it has two main targets: to maintain the unemployment rate at its lowest possible levels and to keep inflation around 2%. The Federal Reserve System's structure is composed of the presidentially appointed Board of Governors and the partially appointed Federal Open Market Committee (FOMC). The FOMC organizes eight scheduled meetings in a year to review economic and financial conditions. It also determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. The FOMC Minutes, which are released by the Board of Governors of the Federal Reserve weeks after the latest meeting, are a guide to the future US interest-rate policy.

Michele Bullock

Michele Bullock is an Australian economist and the current Governor of the Reserve Bank of Australia. She assumed the role in September 2023 and is the first woman to hold the position. She is the Chair of the Reserve Bank Board, Payments System Board and Council of Financial Regulators. Prior to her current role, Bullock was the Deputy Governor of the RBA.

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. He was sworn in on May 23, 2022, for a second term as Chairman ending May 15, 2026. 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: The Japanese Yen (JPY) and the Chinese Yuan (CNY), as Japan and China are the most significant trading partners of Australia. Other relevant currency pairs include EUR/USD , GBP/USD , USD/JPY , USD/CHF, NZD/USD and USD/CAD .
  • Commodities: The most important is Gold, alongside Iron Ore and Natural Gas.
  • Bonds: GACGB10 (Australia 10-year Government Bond Yield), and T-Note 10Y ( 10-year US Treasury note).