AUD/USD Forecast and News
Australian Dollar falls due to market caution ahead of US NFP
The Australian Dollar remains subdued against the US Dollar for the second consecutive day on Friday. The AUD/USD pair holds losses following the release of China's Trade Balance data. Traders shift their focus on the US Nonfarm Payrolls report later in the North American session.
Latest Australian Dollar News
AUD/USD Technical Overview
From a technical viewpoint, AUD/USD is approaching a potential retest of its 2025 high at 0.6408 (February 21). A clear break above this level could set up a move towards the next significant resistance at 0.6549, aligning closely with the 200-day Simple Moving Average (SMA).
On the downside, immediate support is seen at the March low of 0.6186 (March 4). Below this, further losses could target the 2025 bottom at 0.6087 and potentially the psychological 0.6000 level.
Momentum indicators currently reflect improving sentiment. The RSI has risen above 55, suggesting modest recovery momentum, though the ADX reading around 14 indicates that the overall trend still lacks significant strength.
Fundamental Overview
On Thursday, the US Dollar (USD) faced renewed pressure, breaking below the 104.00 contention zone for the first time since early November, driven by unabated worries over the US economy and uncertainty around the US trade policies.
In contrast, the Australian Dollar extended its recovery this week, reclaiming the critical 0.6300 level and well above. Other than USD weakness, also supporting the Aussie were solid Q4 GDP figures from Australia, showing economic growth of 0.6% QoQ and a yearly rise of 1.3%, thanks largely to robust public and private sector spending.
The Reserve Bank of Australia (RBA) expects growth to moderate toward its longer-term trend rate of around 2% by 2025 and maintains a cautious policy stance—factors currently supporting AUD strength.
Trade tensions remain a major influence
Trade jitters remain a key market driver, particularly affecting risk-sensitive currencies like the Australian Dollar. Recently implemented tariffs—including a 25% tariff on Canadian and Mexican goods and a 20% duty on Chinese imports—are raising concerns about escalating trade conflicts.
Given China’s significance as Australia's primary trading partner, any signs of weakening Chinese demand could negatively impact Australia's commodity exports, subsequently weighing on the Aussie dollar. Despite some encouraging business activity data from China over the weekend and strong services figures from Caixin, investor sentiment remains cautious.
Still around China, recent news pointing to further stimulus to support the country’s lagging recovery also played in favour of AUD.
Central banks and inflation in focus
Central banks and inflation remain prominent themes. Increased trade tensions risk pushing inflation higher, potentially prompting the Federal Reserve (Fed) to maintain tighter monetary policy for longer.
Meanwhile, the RBA's February decision to cut rates by 25 basis points to 4.10% was accompanied by signals that this may not mark the start of a sustained easing cycle. Governor Michele Bullock indicated that future rate cuts depend heavily on incoming inflation data, while Deputy Governor Andrew Hauser expressed scepticism about market expectations for multiple rate reductions.
Nonetheless, markets anticipate further cuts totalling 75 basis points over the next year, driven by global uncertainties from trade conflicts.
Inflation and interest rate dynamics
Australia’s latest Monthly CPI Indicator came in at 2.5% for January, slightly below market forecasts. Recent RBA minutes revealed internal discussions over whether to hold rates steady or to implement a small rate cut, ultimately opting for the latter while clearly stating this does not necessarily indicate more cuts ahead. Policymakers highlighted Australia’s relatively lower interest rate peak and stronger initial labour market conditions compared to global peers.
Commodities and AUD performance
Commodity markets continue to influence the Australian Dollar significantly. Copper prices extended Wednesday’s rebound, while iron ore prices managed to reverse their previous day’s pullback and printed a decent advance on Thursday.
Economic data to watch
Looking ahead, next data releases include the Westpac Consumer Confidence and the NAB Business Confidence gauges on March 11, seconded by final Building Permits and Private House Approvals, as well as Industrial Production results all on March 13.
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 tests fresh tops above 1.0870 on NFP
The selling bias in the US Dollar gathers extra pace on Friday after the US economy created fewer jobs than initially estimated in February, sending EUR/USD to the area of new highs around 1.0870.
GBP/USD hovers around recent highs above 1.2900
The continuation of the downward trend in the Greenback encourages GBP/USD to maintain the trade just above the 1.2900 mark following the release of US NFP in February.
USD/JPY: Japanese Yen stands firm near a multi-month high against a broadly weaker USD
The Japanese Yen continues to be underpinned by increasing bets for more BoJ rate hikes. Trade tariff jitters and the risk-off mood further seem to underpin demand for the safe-haven JPY. Expectations for further policy easing by the Fed weigh on the USD and the USD/JPY pair.
Gold remains bid above $2,900 after US Payrolls
Gold prices manage to leave behind Thursday’s pullback and revisits the area of $2,920 per troy ounce in the wake of the publication of the US labour market report in February.
WTI remains on the defensive near $66.00 amid tariff uncertainty
West Texas Intermediate is trading around $66.00 during the early Asian session on Friday. The WTI price remains on the defensive near a three-year low as traders are concerned about the impact of tariffs between the US, Canada, and China and plans by OPEC+ to raise output.
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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).