AUD/USD Forecast and News


Australian Dollar extends losses as US Dollar improves due to increased risk aversion

The Australian Dollar depreciates for the fifth consecutive session on Friday. China's Third Plenum concluded on Thursday without concrete measures to revitalize the faltering economy. The US Dollar may struggle as soft labor data strengthens expectations of a Fed rate cut in September.

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AUD/USD Technical Overview

The Australian Dollar trades around 0.6710 on Friday. The daily chart analysis shows that the AUD/USD pair has fallen below an ascending channel, signaling a weakening bullish bias. Although the 14-day Relative Strength Index (RSI) is slightly above the 50 level, a drop below this level would indicate the onset of bearish momentum.

Immediate support for the AUD/USD pair is seen at the psychological level of 0.6700. A decline below this level could put pressure on the pair to explore the throwback support around 0.6590.

On the upside, the AUD/USD pair might test the lower boundary of the ascending channel near the nine-day Exponential Moving Average (EMA) at 0.6726. A return into the ascending channel could bolster the bullish bias and potentially drive the pair to 0.6800 before the upper boundary of the channel at 0.6840.


Fundamental Overview

The Australian Dollar (AUD) extends its losing streak for the fifth successive session on Friday. This decline in the AUD/USD pair can be attributed to the strengthening of the US Dollar (USD) due to increased risk aversion. However, the downside for the AUD may be limited by higher-than-expected Employment Change figures, which indicate tight labor market conditions and raise concerns about a potential interest rate hike from the Reserve Bank of Australia (RBA).

Australian Bureau of Statistics on Thursday showed that Employment Change increased by 50,200 in June from May, surpassing market forecasts of 20,000. This data slightly shifted investors' expectations toward a potential rate hike from the Reserve Bank of Australia in August, with swaps implying a 20% probability, up from 12% previously, according to Reuters. However, the Unemployment Rate increased to 4.1% from 4.0%, contrary to forecasts of a steady outcome.

The US Dollar is supported by an increase in US Treasury yields. However, the upside for the greenback may be limited due to soft labor data, which strengthens market expectations of a rate cut decision by the Federal Reserve (Fed) in September.

According to CME Group’s FedWatch Tool, markets now indicate a 93.5% probability of a 25-basis point rate cut at the September Fed meeting, up from 85.1% a week earlier.



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. 

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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 recover above 1.0900 as markets remain cautious

EUR/USD struggles to recover above 1.0900 as markets remain cautious

EUR/USD stays on the back foot and trades below 1.0900 following Thursday's sharp decline. Dovish comments from European Central Bank officials and the risk-averse market atmosphere make it difficult for the pair to stage a rebound on Friday.

EUR/USD News

GBP/USD falls toward 1.2900, looks to post weekly losses

GBP/USD falls toward 1.2900, looks to post weekly losses

GBP/USD continues to push lower toward 1.2900 in the American session on Friday. Disappointing Retail Sales data from the UK, combined with the US Dollar (USD) recovery amid souring mood, causes the pair to stay under bearish pressure ahead of the weekend.

GBP/USD News

USD/JPY eases below 157.50 after Japan's warnings

USD/JPY eases below 157.50 after Japan's warnings

USD/JPY is easing below 157.50 in Asian trading on Friday, with the Japanese Yen gaining ground on warnings from the authorities. Broad US Dollar strength and higher US Treasury bond yields, however, keep the pair afloat ahead of Fedspeak. 

USD/JPY News

Gold extends daily slide, trades near $2,400

Gold extends daily slide, trades near $2,400

Gold's correction from the record-high set earlier in the week deepens on Friday. With the US Dollar (USD) benefiting from safe-haven flows and the 10-year US yield holding steady above 4.2%, XAU/USD tests $2,400 and looks to post small weekly losses

Gold News

WTI drops toward $81.00 as US Dollar remains stable

WTI drops toward $81.00 as US Dollar remains stable

WTI price loses ground as US Dollar holds ground due to improved yields. Crude Oil may limit its downside as traders expect the Fed to reduce rates in September. Fed Governor Christopher Waller stated that the US central bank is ‘getting closer’ to a rate cut.

Oil News

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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).