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Australian Dollar losses steam at 0.7000 as PMIs signal a deceleration

  • AUD/USD slips 0.17% to 0.7017 amid technology-led market weakness.
  • Australian Services PMI plunges to 47.5, signaling renewed economic contraction.
  • November RBA hike odds remain at 57% despite weakening business activity.

The Australian Dollar retreats 0.17% against the US Dollar on Thursday as sentiment soured on US tech stocks falling on worries about AI valuations, while Oil surged on an escalation of the US-Iran conflict. The AUD/USD trades at 0.7017.

AUD/USD retreats as Australia's business activity contracts and global risk appetite deteriorates

Wall Street finished the session lower, while US Treasury yields dropped as investors rotated out of stocks into the safety of US Treasuries. This weakened the Greenback, which, according to the US Dollar Index (DXY), which measures the value of the Dollar against its peers, is down 0.02% at 101.61.

The US-Iran conflict escalates as Washington and Jerusalem prepare to resume attacks after the US elections. Saudi-Houthi clashes fuel energy prices, lifting the dollar.

Aside from this, US initial jobless claims for the week ending October 17 came in below expectations and the previous reading of 200K, at 194K—a near 57-year low. The four-week average also dipped to 197.75K, pointing to a resilient labor market.

In Australia, business activity deteriorated as the services sector joined manufacturing in contracting. The S&P Global Services PMI shrank from 51.9 to 47.5, while the Manufacturing PMI moderately improved from 49.6 to 49.7.

Jingyi Pan, Economics Associate Director at S&P Global Market Intelligence, said: ”Based on comments gathered from companies, we attribute the latest downturn to both higher prices and rising interest rates eroding demand.”

Despite this, money markets had priced in a 57% chance that the Reserve Bank of Australia (RBA) will increase rates at the November meeting  as the RBA’s Deputy Governor Hauser said that “monetary policy is working, but the inflation outlook has worsened.”

Ahead, the US economic schedule will feature the University of Michigan Consumer Sentiment, ahead of the Federal Reserve’s monetary policy next week and the release of the Core PCE on October 29.

AUD/USD Price Forecast: Technical outlook

Chart Analysis AUD/USD
AUD/USD daily chart

In the daily chart, AUD/USD trades at 0.7017, keeping a cautious bearish bias as spot holds below the clustered simple moving averages around 0.7076 and beneath an ascending trend-line barrier near 0.7095. The Relative Strength Index (14) hovers just above 50, hinting at stabilizing momentum, but with price still capped by nearby overhead structure, rallies appear vulnerable unless buyers can reclaim the 0.7070–0.7100 region decisively.

On the topside, initial resistance emerges at the triple simple moving average around 0.7076, followed by the upward trend-line cap near 0.7095, with a stronger barrier sitting at the horizontal level of 0.7198. On the downside, first support aligns with the rising trend line around 0.6918, ahead of a broader band of ascending supports stemming from the 0.6897–0.6833 zone, with deeper backing seen toward the 0.6673 handle and the old trend-line break area near 0.6356.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Australian Dollar Price This week

The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies this week. Australian Dollar was the strongest against the US Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.31%-0.70%-0.92%-0.83%-0.87%-0.49%-0.76%
EUR0.31%-0.36%-0.60%-0.45%-0.47%-0.17%-0.42%
GBP0.70%0.36%-0.23%-0.10%-0.09%0.21%-0.01%
JPY0.92%0.60%0.23%0.13%0.07%0.45%0.30%
CAD0.83%0.45%0.10%-0.13%-0.05%0.37%0.11%
AUD0.87%0.47%0.09%-0.07%0.05%0.31%0.06%
NZD0.49%0.17%-0.21%-0.45%-0.37%-0.31%-0.23%
CHF0.76%0.42%0.00%-0.30%-0.11%-0.06%0.23%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

Author

Christian Borjon Valencia

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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