AUD/USD Forecast and News
AUD/USD holds gains above 0.7100 with US jobs, Australian inflation eyed
The Aussie Dollar has ticked down from fresh three-year highs at 0.7128 against the US Dollar, but remains steady above previous highs of 0.7095, as investors brace for the US Non-farm Payrolls release, due later on the day, and the Australian Consumer Inflation Expectations report, on Thursday.
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AUD/USD Technical Overview
Immediately to the upside for AUD/USD emerges the 2026 ceiling at 0.7098 (February 9), seconded by the 2023 peak at 0.7157 (February 2).
On the other hand, the loss of the February base at 0.6896 (February 26) exposes a probable decline to the transitory 55-day SMA at 0.6733 prior to the 2026 bottom at 0.6663 (January 9), and the temporary 100 day SMA at 0.6643. Once this region is cleared, spot could challenge its critical 20-day SMA at 0.6576, ahead of the November 2025 floor at 0.6421 (November 21).
Meanwhile, momentum indicators remain firm: the Relative Strength Index (RSI) hovers around the 68 level, while the Average Directional Index (ADX) above 48 is indicative of a strong trend.
Bottom line
AUD/USD remains closely tied to global risk sentiment and China’s growth outlook. A sustained break above the 0.7000 handle would help turn the current constructive bias into a more convincing bullish signal.
For now, a softer USD, steady if unspectacular domestic data, a clearly hawkish RBA, and a broadly supportive, if uninspiring, China backdrop keep the balance of risks tilted toward further upside rather than a meaningful reversal.
Fundamental Overview
The Greenback is struggling to regain lost ground following downbeat US Retail Sales and softer labour costs data on Tuesday, which have provided further reasons for the US Federal Reserve's dovish party to call for immediate rate cuts.
US retail consumption stagnated in December, according to data from the US Census Bureau, against expectations of a 0.4% growth and following a 0.6% monthly increase in November. The Retail Sales Control Group, also known as the “core” Retail Sales, contracted 0.1%, and November’s reading was revised down to a 0.2% rise from the 0.4% previously estimated.
US employment costs hint at a cooling labour market
Also on Tuesday, figures released by the Bureau of Labor Statistics (BLS) revealed that the US Employment Cost Index eased to 0.7% in the last quarter of 2025, from 0.8% in the previous quarter. In 2025, labour costs grew at their slowest annual rate of the last four years. These figures point to lower inflationary pressures but also to a softening labour market.
On Wednesday, the focus shifts to the US Nonfarm Payrolls (NFP) report, which is expected to show a 70K increase in net jobs, with the unemployment rate steady at 4.4% and wage growth confirming the disinflationary trends, with a 3.6% yearly rise, down from 3.8% in December.
In Australia, investors will be attentive to the Consumer Inflation Expectations figures, due on Thursday, to corroborate the comments from the Reserve Bank of Australia’s (RBA) Deputy Governor. Andrew Hauser. Hauser said on Tuesday that inflation is too high and that the bank is ready to do whatever is needed to bring it down to the target, which provided an additional boost to the Aussie.
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Editors' picks
How will markets react to January Nonfarm Payrolls data? – LIVE
Nonfarm Payrolls in the US are forecast to rise 70K in January. Annual benchmark revisions and methodology updates could offer additional insights into the labor market conditions and drive the US Dollar's performance by influencing the Fed policy outlook.
EUR/USD holds firm above 1.1900 as US NFP looms
EUR/USD holds its upbeat momentum above 1.1900 in the European trading hours on Wednesday, helped by a broadly weaker US Dollar. Markets could turn cautious later in the day as the delayed US employment report for January will takes center stage.
Gold sticks to gains near $5,050 as focus shifts to US NFP
Gold holds moderate gains near the $5,050 level in the European session on Wednesday, reversing a part of the previous day's modest losses amid dovish US Federal Reserve-inspired US Dollar weakness. This, in turn, is seen as a key factor acting as a tailwind for the non-yielding yellow metal ahead of the critical US NFP release.
GBP/USD remains above nine-day EMA near 1.3650
GBP/USD recovers its recent losses from the previous session, trading around 1.3680 during the European hours on Wednesday. The technical analysis of the daily chart indicates a sustained bullish bias, as the pair trades within an ascending channel pattern.
S&P 500 at 7,000 is a valuation test, not a liquidity problem
The rebound from last week’s drawdown never quite shook the sense that it was being supported by borrowed conviction. The S&P 500 once again tested near the 7,000 level (6,986 as the high watermark) and failed, despite a macro backdrop that would normally be interpreted as supportive of risk.
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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 AUD/USD currency pair, commonly known as the "Aussie", represents how many US dollars (the quote currency) are needed to purchase one Australian dollar (the base currency). Alongside the New Zealand Dollar (NZD) and the Canadian Dollar (CAD), the AUD is considered a commodity currency due to Australia’s significant exports of raw materials such as precious metals, Oil, and agricultural products.
The Reserve Bank of Australia (RBA) has historically maintained higher interest rates compared to other industrialized nations. Combined with the relatively high liquidity of the AUD, this has made the AUD attractive for carry traders looking for higher yields.
Australia’s economy and currency are closely tied to China, its largest trading partner. Any changes in the Chinese economy can significantly impact the AUD. Additionally, the Australian Dollar is often seen as a diversification tool due to its exposure to Asian economies.
The pair AUD/USD also correlates with Gold prices. Gold is widely viewed as a safe haven asset against inflation and it is one of the most traded commodities.
INFLUENTIAL ORGANIZATIONS AND PEOPLE FOR THE AUD/USD
Reserve Bank of Australia (RBA)
The Reserve Bank of Australia (RBA) is Australia's central bank, deriving its functions and powers from the Reserve Bank Act 1959. Its primary duty is to contribute to currency stability, full employment and the economic prosperity and welfare of the Australian people. The RBA achieves this by setting the cash rate to meet a medium-term inflation target of between 2% and 3%, maintaining a strong financial system and efficient payment infrastructure and issuing the nation's banknotes.
Decisions are made by a board of governors at eight meetings a year and ad hoc emergency meetings as required.
The RBA provides banking services to the Australian Government, its agencies and several overseas central banks and official institutions. Additionally, it manages Australia's gold and foreign exchange reserves.
The official website, on X and YoutubeThe Federal Reserve (Fed)
The Federal Reserve (Fed) is the central bank of the United States (US) and it has two main targets: to maintain the unemployment rate at its lowest possible levels and to keep inflation around 2%. The Federal Reserve System's structure is composed of the presidentially appointed Board of Governors and the partially appointed Federal Open Market Committee (FOMC). The FOMC organizes eight scheduled meetings in a year to review economic and financial conditions. It also determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. The FOMC Minutes, which are released by the Board of Governors of the Federal Reserve weeks after the latest meeting, are a guide to the future US interest-rate policy.
Fed official website, on X and FacebookMichele Bullock
Michele Bullock is an Australian economist and the current Governor of the Reserve Bank of Australia. She assumed the role in September 2023 and is the first woman to hold the position. She is the Chair of the Reserve Bank Board, Payments System Board and Council of Financial Regulators. Prior to her current role, Bullock was the Deputy Governor of the RBA.
Bullock on her RBA 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. He was sworn in on May 23, 2022, for a second term as Chairman ending May 15, 2026. 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: The Japanese Yen (JPY) and the Chinese Yuan (CNY), as Japan and China are the most significant trading partners of Australia. Other relevant currency pairs include EUR/USD, GBP/USD, USD/JPY, USD/CHF, NZD/USD and USD/CAD.
- Commodities: The most important is Gold, alongside Iron Ore and Natural Gas.
- Bonds: GACGB10 (Australia 10-year Government Bond Yield), and T-Note 10Y ( 10-year US Treasury note).