AUDUSD Forecast and News
Australian Dollar moves sideways after trimming intraday gains, focus on US data
Australian Dollar moves sideways after trimming intraday gains. Aussie pair dipped post-release of the US headline inflation. Consumer Inflation Expectations raised the odds of RBA to increase interest rates. US Dollar advanced following the slew of upbeat US data, awaiting US Consumer Sentiment.
Latest AUD News
Technical Overview
The Australian Dollar trades around 0.6320, aligned to the major support level at 0.6300 lined up with a monthly low at 0.6285. The 23.6% Fibonacci retracement level at 0.6429 acts as strong resistance, followed by the 50-day Exponential Moving Average (EMA) at 0.6445 level. A clear breakthrough could pave the way for upward momentum, aiming at the psychological milestone of 0.6500.
Fundamental Overview
The Australian Dollar (AUD) snaps a two-day losing streak post a slew of optimistic economic data from the United States (US) during the week. With US inflation surpassing expectations and initial jobless claims coming in lower than anticipated, discussions about the trajectory of the US Federal Reserve's (Fed) monetary policy have been reignited.
Australia has experienced a rise in consumer expectations regarding inflation, a trend likely influenced by an increase in oil prices. The upcoming focal points include the release of Meeting Minutes from the Reserve Bank of Australia (RBA) and employment data in the next week.
This downbeat Chinese inflation data has the potential to impact the Australian Dollar, considering Australia's significant role as a major exporter to China. Economic dynamics between these two countries often influence the performance of the Aussie Dollar, and the subdued inflation figures from China may contribute to undermining its strength.
The US Dollar Index (DXY) gained upward momentum after a robust release of US data. Nonetheless, on Friday, the US Dollar (USD) is trading marginally lower, influenced by a retreat in US Treasury yields following a recent surge. Market participants are expected to redirect their attention to the Michigan Consumer Sentiment Index set to be released on Friday.
Investors seem to factor in the possibility of another Fed rate hike. This is noteworthy given the recent mixed rhetoric from most Fed officials, emphasizing the necessity for the US central bank to maintain higher rates for an extended period, even without signaling a clear intention for another rate increase.
SPECIAL WEEKLY FORECAST
Interested in weekly AUDUSD forecasts? Our experts make weekly updates forecasting the next possible moves of the aussie-dollar pair. Here you can find the most recent forecast by our market experts:
AUD/USD: Interim top confirmed, 0.7000 at risk Premium
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.
Big Picture
AUDUSD Bullish Themes
AUDUSD Bearish Themes
Latest AUD Analysis
Editors' picks
EUR/USD stabilizes near 1.0500, looks to post weekly losses
EUR/USD extended its daily decline toward 1.0500 in the second half of the American session, pressured by the souring market mood. Despite the bullish action seen earlier in the week, the pair remains on track to register weekly losses.
GBP/USD falls below 1.2150 as USD rebounds
Following an earlier recovery attempt, GBP/USD turned south and declined below 1.2100 in the second half of the day on Friday. The negative shift seen in risk mood amid rising geopolitical tensions helps the US Dollar outperform its rivals and hurts the pair.
USD/JPY consolidates near 149.70 ahead of the US Consumer Sentiment
USD/JPY snaps the recent winning streak ahead of US data. A slew of solid US data could underpin the US Dollar. S&P Global anticipates that Japan could see upward interest rates trajectory, beginning in 2024.
Gold advances to fresh multi-week highs above $1,920
Gold extended its daily rally and climbed above $1,920 for the first time in over two weeks on Friday. Escalating geopolitical tensions ahead of the weekend weigh on T-bond yields and provide a boost to XAU/USD, which remains on track to gain nearly 5% this week.
Oil faces headwinds over demand fall despite US sanctions on Russian crude
Oil (WTI) trades broadly steady at $83 after a surprise buildup in US Oil stockpiles. The US Dollar rallied Thursday on the back of an unexpected pickup on food and energy inflation. Oil is expected to extend losses as demand is expected to weaken further.
Majors
Cryptocurrencies
Signatures
AUDUSD YEARLY FORECAST
How could AUDUSD move this year? Our experts make an AUDUSD update forecasting the possible moves of the aussie-dollar pair during the whole year. Don't miss our 2023 AUDUSD forecast!
AUDUSD FORECAST 2023
The Australian Dollar is facing headwinds yet again against the US Dollar, as the central bank divergence theme is back in play in early 2023. The US Federal Reserve (Fed) is expected to deliver further rate increases than previously expected while the Reserve Bank of Australia (RBA) is nearing the end of its tightening cycle.
Leading momentum indicators retain their hold in the bearish territory, suggesting that the AUD/USD pair is likely to remain a ‘sell on rallies’ trade in the 2023 year ahead.
MOST INFLUENTIAL POLITICAL EVENTS IN 2023 FOR AUDUSD
AUD/USD’s recovery from the last quarter of 2022, fuelled by China’s re-opening-led optimism, seems to have lost traction. Hawkish Federal Reserve expectations combined with renewed geopolitical fears surrounding the United States, Russia and China and the downward pressure on commodities prices could leave the Aussie pair vulnerable in the balance of this year.
About AUDUSD
AUDUSD, The 'Aussie'
The AUDUSD 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.
AUDUSD 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 AUDUSD 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 AUDUSD
The AUDUSD 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 Philip Lowe.
- 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.
Philip Lowe
Philip Lowe is Governor of the Reserve Bank of Australia. Dr Lowe holds a PhD from the Massachusetts Institute of Technology and a B.Comm (Honours) in Economics/Econometrics from the University of New South Wales. He has authored numerous papers, including on the linkages between monetary policy and financial stability. He commenced as Governor on 18 September 2016.
Lowe on RBA'S Profile and Wikipedia
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.
Jerome Powell Fed's Profile and Wikipedia
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).