AUD/USD Exchange rate
Editors’ Picks
EUR/USD stays near 1.0400 in thin holiday trading
EUR/USD trades with mild losses near 1.0400 on Tuesday. The expectation that the US Federal Reserve will deliver fewer rate cuts in 2025 provides some support for the US Dollar. Trading volumes are likely to remain low heading into the Christmas break.
GBP/USD struggles to find direction, holds steady near 1.2550
GBP/USD consolidates in a range at around 1.2550 on Tuesday after closing in negative territory on Monday. The US Dollar preserves its strength and makes it difficult for the pair to gain traction as trading conditions thin out on Christmas Eve.
Gold holds above $2,600, bulls non-committed on hawkish Fed outlook
Gold trades in a narrow channel above $2,600 on Tuesday, albeit lacking strong follow-through buying. Geopolitical tensions and trade war fears lend support to the safe-haven XAU/USD, while the Fed’s hawkish shift acts as a tailwind for the USD and caps the precious metal.
IRS says crypto staking should be taxed in response to lawsuit
In a filing on Monday, the US International Revenue Service stated that the rewards gotten from staking cryptocurrencies should be taxed, responding to a lawsuit from couple Joshua and Jessica Jarrett.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
Majors
Cryptocurrencies
Signatures
AUD/USD, THE “AUSSIE”
The AUD/USD pair, the “Aussie”, tells the trader how many US dollars (the quote currency) are needed to purchase one Australian dollar (the base currency). The AUD is a commodity 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.
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 Australian Dollar is known by its greater exposure to Asian economies. Also, 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.
FORECAST FOR 2024
The Australian Dollar (AUD) started 202 on a high note, though slumped closer to its post-pandemic low against the USD during the latter part of the year. The currency clawed back some of its steep declines during the final two months of 2023, and the outlook seems sunnier in the wake of the prevalent bearish sentiment surrounding the Greenback.
ASSETS THAT INFLUENCE AUD/USD THE MOST
- Currencies: NZD and JPY. This group also includes EUR/USD, GBP/USD, USD/JPY, USD/CHF, NZD/USD, USD/CAD, GBP/JPY and EUR/JPY
- Commodities: Gold, 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 United States Treasury note).
- Indices: S&P/ASX 200 (stocks of the Australian Securities Exchange), S&P/TSX Global Gold Index (producers of gold and related products at the Toronto Stock Exchange).
ORGANIZATIONS, PEOPLE AND ECONOMIC DATA THAT INFLUENCE AUD/USD
The organizations and people that affect the most the moves of the AUD/USD pair are:
- 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 (and its President Joe Biden): 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 AUD/USD 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 (Consumer 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 a trade surplus, while a negative value shows a 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.