AUD/USD Forecast and News


AUD/USD extends downside to 0.6400 as Fed seems to delay rate cuts

AUD/USD slips to 0.6400 amid Middle East tensions, faded speculation for Fed rate cuts. Fed Daly sees no urgency for rate cuts with high inflation and a strong labor demand. The Chinese economy has exhibited a strong footing in the first quarter of this year.

Latest Australian Dollar News


AUD/USD Technical Overview

If sellers maintain control and AUD/USD breaches its 2024 bottom of 0.6397 (April 16), the pair could slip back to the 2023 low of 0.6270 (October 26), before the round level of 0.6200.

On the other hand, there is an immediate obstacle at the crucial 200-day SMA of 0.6538 prior to the April top of 0.6644, followed by the March peak of 0.6667 (March 8) and the December 2023 high of 0.6871. Further north, the July top of 0.6894 (July 14) comes ahead of the June peak of 0.6899 (June 16) and the critical 0.7000 mark.

Looking at the bigger picture, the pair is expected to continue its negative trend while maintaining below the crucial 200-day SMA.

On the 4-hour chart, the pair's selling bias appears to be gathering steam. That said, the initial support stands at 0.6397, followed by 0.6338. On the upside, 0.6493 provides immediate resistance before 0.6552. Furthermore, the MACD stayed negative, and the RSI dipped to around 25.


Fundamental Overview

The Australian Dollar (AUD) retreated for the third straight session on Tuesday on the back of the ongoing strengthening of the Greenback, causing AUD/USD to slip back to five-month lows in levels just below 0.6400 the figure.

The downward momentum in the Aussie dollar intensified recently due solely to heightened buying activity in the US Dollar (USD), which regained strength following March's higher-than-expected US inflation figures and increasing conviction of a delayed interest rate cut by the Federal Reserve (Fed).

Bolstering the pair’s subdued price action, commodities appear to have halted their recent strong uptick, with copper prices meeting decent resistance around the $840.00 zone and iron ore struggling to push higher despite auspicious results from the Chinese GDP figures for the January-March period.

Regarding monetary policy, the Reserve Bank of Australia (RBA) reiterated its commitment to maintaining current policies in the Minutes of its March meeting. Additionally, futures for the RBA cash rate imply an expectation of approximately 50 basis points of rate cuts in 2024, with the first cut potentially occurring in December.

It's notable that the RBA, alongside the Fed, is now one of the last G10 central banks expected to consider adjusting interest rates this year.

With the Fed maintaining a steadfast approach to tighter monetary policies and the potential for the RBA to embark on an easing cycle later in the year, the AUD/USD faces an increased likelihood of sustained downward pressure in both the short and medium terms.



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

AUD/USD: Interim top confirmed, 0.7000 at risk

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. 

Read full analysis

AUD/USD Big Picture

AUD/USD Bullish Themes

AUD/USD Bearish Themes

TOP BROKER


FXS Signals

Latest Australian Dollar Analysis


Latest AUD Analysis

Editors' picks

EUR/USD fluctuates in daily range above 1.0600

EUR/USD fluctuates in daily range above 1.0600

EUR/USD struggles to gather directional momentum and continues to fluctuate above 1.0600 on Tuesday. The modest improvement seen in risk mood limits the US Dollar's gains as investors await Fed Chairman Jerome Powell's speech.

EUR/USD News

GBP/USD stabilizes near 1.2450 ahead of Powell speech

GBP/USD stabilizes near 1.2450 ahead of Powell speech

GBP/USD holds steady at around 1.2450 after recovering from the multi-month low it touched near 1.2400 in the European morning. The USD struggles to gather strength after disappointing housing data. Market focus shifts to Fed Chairman Powell's appearance.

GBP/USD News

Japanese Yen bears turn cautious amid intervention fears and geopolitical tensions

Japanese Yen bears turn cautious amid intervention fears and geopolitical tensions

The Japanese Yen remains depressed near a multi-decade low amid the BoJ’s dovish outlook. Reduced Fed rate cut bets lift the USD to a fresh YTD top and further lend support to USD/JPY. Intervention fears and a softer risk tone could help limit deeper losses for the safe-haven JPY.

USD/JPY News

Gold aiming to re-conquer the $2,400 level

Gold aiming to re-conquer the $2,400 level

Gold stages a correction on Tuesday and fluctuates in negative territory near $2,370 following Monday's upsurge. The benchmark 10-year US Treasury bond yield continues to push higher above 4.6% and makes it difficult for XAU/USD to gain traction.

Gold News

WTI trims gains amid market caution after Iran’s attack on Israel, remains above $85.00

WTI trims gains amid market caution after Iran’s attack on Israel, remains above $85.00

West Texas Intermediate Oil price edges higher to near $85.30 per barrel during the Asian trading hours on Tuesday. The crude Oil prices receive upward support due to concerns about the escalating tensions between Israel and Iran, particularly in the wake of Iran's missile and drone attacks on Saturday.

Oil News

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.

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).