AUD/USD: Fed’s policy to continue supporting the US Dollar – Danske Bank

Matías Salord FXStreet

The AUD/USD pair dropped sharply on Thursday and it stabilized slightly below 0.6700 on Friday. According to analysts from Danske Bank, the AUD/USD pair will move lower over the next months. They forecast it at 0.66 in three months and at 0.65 in six months.

Key Quotes:

“Lower-than-expected inflation prints from the US, consequent speculation on Fed possibly easing its monetary policy earlier and the turnaround in Chinese Covid-policies have continued to support AUD/USD.”

“The Reserve Bank of Australia (RBA) hiked rates again by 25bp in the December meeting. While RBA signalled that rate hikes would continue in 2023, markets are pricing around 50% probability of a pause in the hiking cycle amid weakening economy and especially the housing market.”

“We still think that especially the Fed will have to continue tightening financial conditions in early 2023, which supports broad USD. While the worsening Covid-situation is weighing on Chinese economy during winter, the gradual reopening could support Australian export prices going forward. We maintain a modestly downward-sloping forecast profile.”

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

AUD/USD holds firm near 0.7000 after Chinese inflation, trade data

AUD/USD stays firm near 0.7000 in Wednesday’s Asian session, picking up some bids after China's mixed inflation and upbeat trade data. CPI rose less than expected in September, while PPI inflation picked up. Meanwhile, the Chinese trade surplus unexpectedly widened in September. The pair remains underpinned by a broadly subdued US Dollar, despite the Middle East escalation, as focus remains on US CPI data.

USD/JPY consolidates near 158.50; looks to US CPI for fresh impetus

USD/JPY stays range-bound near 158.50 in the Asian session on Wednesday, with looming intervention risks supporting the Japanese Yen and capping upside amid a softer US Dollar. However, geopolitical uncertainties act as a tailwind for the safe-haven USD and the pair. Traders also seem hesitant ahead of the release of the latest US inflation figures.

Gold remains offered below $4,100

Gold adds to the weekly bearish tone and slips back below the $4,100 mark per troy ounce on Wednesday. Indeed, the precious metal continues to suffer the stronger US Dollar and rising US Treasury yields as bets for extra tightening by the Fed remain on the rise following US inflation figures.

XRP recovery faces headwinds despite Ripple and Meritz Securities' tokenization push in Korea

XRP trades above $1.36 as bulls gather momentum to face a critical supply range toward $1.40. Ripple and Meritz Securities partner to explore institutional custody and tokenization services for South Korea’s capital markets.

China's rare earth leverage has an expiration date: November 10. Here's what Beijing is deciding

China is approaching a major strategic deadline in its trade confrontation with the United States (US). On November 10, the suspension of additional rare earth export restrictions Beijing announced in October 2025 is set to expire.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?