AUD/USD Forecast and News
AUD/USD holds gains above 0.6350 amid US Dollar weakness
AUD/USD holds gains above 0.6350 in the Asian session on Monday. The sustained US Dollar weakness and prospects of Russia-US meeting outweigh dovish RBA expectations, supporting the pair amid a US holiday-thinned market. All eyes remain on Tuesday's RBA interest rate decision.
Latest Australian Dollar News
AUD/USD Technical Overview
On the downside, the 0.6087 zone stands as critical support for AUD/USD—it’s the lowest level the pair has hit so far this year. A break below could open the door to the key 0.6000 region.
On the flip side, the first hurdle is the yearly peak at 0.6330, followed by the 100-day Simple Moving Average (SMA) at 0.6451, and then 0.6549 (the weekly high from November 25).
Additionally, some indicators offer mixed signals: The Relative Strength Index (RSI) remains near 55, hinting at weakening bullish momentum, while the Average Directional Index (ADX), around 18, suggests a lack of a strong trend.
Fundamental Overview
On Thursday, the US Dollar (USD) faces an accelerated downward bias that sent the US Dollar Index (DXY) to the area of weekly lows in the mid-107.00s, despite another firm print of United States (US) inflation in January, this time coming from Producer Prices.
In the meantime, the Australian Dollar (AUD) managed to capitalize well on the Greenback’s pullback, leaving behind Wednesday’s retracement and retesting the 0.6399 region, the upper end of the monthly range.
Trade turbulence and tariff tensions
Recent trade disputes have seen the Australian Dollar track along with other risk-linked currencies, largely because the US Dollar had been losing steam and markets remained unsure about the latest tariff drama from Washington.
- Tariff updates: President Trump delayed a 25% tariff on Canadian and Mexican goods by one month, which initially lifted market sentiment. However, fresh tariff threats soon knocked confidence down again.
- China in the crosshairs: The US also hit Chinese imports with a 10% tariff, sparking fears that Beijing might retaliate. Since China is Australia’s biggest export destination, any countermeasures could dent demand for Australian commodities. Beijing has hinted it could challenge these tariffs at the World Trade Organization (WTO), adding to the uncertainty for resource-based economies like Australia.
Inflation, the Fed and the road ahead
Although the US Dollar has recouped some recent losses, the possibility of a deepening trade war still hangs over the market. If trade tensions heat up further, US inflation might rise, which could prompt the Federal Reserve (Fed) to maintain its restrictive stance for a longer period.
In Australia, eyes are on the Reserve Bank of Australia (RBA). Latest figures suggest inflation is cooling:
- Fourth-quarter Consumer Price Index (CPI) rose by 2.5% year-over-year, down from 2.8%
- The trimmed mean CPI—a key RBA gauge—slipped to a three-year low of 3.2%
As investors continue dialling back their bets on US rate cuts this year, market participants are almost certain the RBA will kick off its easing cycle next week.
With a 90% probability priced in, the RBA is widely expected to trim its cash rate from 4.35% to 4.10% on February 18. However, expectations for deeper cuts remain muted, with markets only forecasting 75 basis points of easing for 2025.
The big question: What happens next? If the RBA does pull the trigger on a cut, investors anticipate minimal forward guidance, leaving markets to speculate on whether this is the start of a slow, measured cycle—or just a one-off move to cushion a cooling economy.
Commodities do not offer support
Australia’s export outlook can be murky when Chinese demand is at risk. Iron ore and copper—two pillars of Australia’s economy—could face pressure if trade frictions persist. Thursday’s pullback on both these commodities also contributed to the offered stance in spot.
What’s next?
Looking ahead, traders will keep an eye on the Melbourne Institute’s Consumer Inflation Expectations set for release on February 14. Any surprises there could stir further moves in the Aussie Dollar, especially as the next RBA decision approaches.
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
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.
AUD/USD Big Picture
AUD/USD Bullish Themes
AUD/USD Bearish Themes
Latest AUD Analysis
Editors' picks
EUR/USD stays defensive below 1.0500 amid light trading
EUR/USD struggles to capitalize on recent upside and oscillates in a narrow range below 1.0500 in European trading on Monday. However, the pair's downside remains cushioned by persistent US Dollar weakness and an upbeat mood. Focus shifts to central bank talks.
GBP/USD ranges near 1.2600 as US Dollar steadies
GBP/USD keeps its range near 1.2600 in the early European session on Monday. The pair stays support amid a subdued US Dollar price action following Friday's disappoining US Retail Sales data. Thin trading is likely to extend as US markets are closed in observance of Presidents' Day.
USD/JPY off lows but heavy near 151.50 amid upbeat Japan's Q4 GDP
The Japanese Yen sticks to its strong intraday gains in the wake of a strong domestic Gross Domestic Product print, which reaffirmed bets that the Bank of Japan will hike interest rates further.
Gold: Bulls have the upper hand near $2,900 amid trade war fears and weaker USD
Gold regained positive traction on Monday amid sustained USD weakness. Concerns about Trump’s tariffs further benefit the safe-haven XAU/USD pair. The fundamental and technical setup underpin prospects for additional gains.
WTI holds steady above $70.50, eyes on Russia-Ukraine peace deal
West Texas Intermediate Oil price rebounds from losses in the previous session, trading around $70.60 per barrel during Monday’s Asian hours. However, crude Oil prices faced headwinds as optimism surrounding a potential peace deal between Russia and Ukraine eased supply concerns.
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AUD/USD YEARLY FORECAST
What would happen to the AUD/USD this year? A brief update from our experts on where the AUD/USD can go in the upcoming months.
AUD/USD FORECAST 2025
The battle between the Australian Dollar (AUD) and the US Dollar (USD) will be one worth watching in 2025, with central banks stealing the limelight. The Reserve Bank of Australia (RBA) has kept interest rates at record highs whilst most of its overseas counterparts started the loosening process. The US Federal Reserve (Fed), on the other hand, has trimmed the benchmark interest rate by 100 bps through 2024 and aims to slow the pace of cuts in 2025. The central banks’ imbalance aims for record lows in AUD/USD.
MOST INFLUENTIAL POLITICAL EVENTS IN 2025 FOR AUD/USD
Beyond central banks, market players will be attentive to tariffs. The second coming of Donald Trump to the White House anticipates a global Trade War that could fuel inflationary pressures not only in the United States, but also in all major economies.
Given Trump’s personal battle with China, the Australian economy could end up benefiting from fresh commercial interactions with its neighbour giant.
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.
Michele Bullock 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).