AUD/USD Forecast and News


Australian Dollar holds position near a psychological level, US Consumer Sentiment eyed

The Australian Dollar retreated due to the recovery of the US Dollar on Friday. The Australian Dollar is facing pressure due to the RBA's less hawkish stance on monetary policy. The US Dollar rebounded due to the expectations of the hawkish Fed maintaining higher rates for longer.

Latest Australian Dollar News


AUD/USD Technical Overview

The Australian Dollar trades around 0.6610 on Friday. The AUD/USD pair is consolidating within a symmetrical triangle pattern, with the 14-day Relative Strength Index (RSI) indicating a bullish bias by hovering above the 50-level.

The AUD/USD pair could test the upper boundary around the swing area at the level of 0.6650. A break above this level may lead the pair to retest March’s high of 0.6667, with further upside potential toward the psychological level of 0.6700.

On the downside, immediate support for the AUD/USD pair is expected at the psychological level of 0.6600, followed by the 14-day Exponential Moving Average (EMA) around 0.6566. If the pair breaches below the EMA, it could face additional selling pressure, potentially targeting the region around the lower boundary of the symmetrical triangle near the level of 0.6465.


Fundamental Overview

The Australian Dollar (AUD) is retracing its recent gains on Friday, following a rally on Thursday. The rally was propelled by a decline in the US Dollar (USD) as weak US Initial Jobless Claims indicated a more dovish outlook for the Federal Reserve (Fed). This helped offset pressure on the Aussie Dollar resulting from the Reserve Bank of Australia (RBA)'s less hawkish stance, especially in light of the higher-than-expected inflation data.

The Australian inflation rate dropped to 3.6% in the first quarter from 4.1% in the previous quarter, marking the fifth consecutive quarter of slowing. However, it exceeded forecasts of 3.4%. Additionally, the Monthly Consumer Price Index (YoY) for March surged to 3.5%, surpassing the expected reading of 3.4%. The Reserve Bank of Australia (RBA) acknowledged that recent progress in controlling inflation has stalled and maintained its stance of keeping options open.

The US Dollar Index (DXY), which gauges the performance of the US Dollar (USD) against six major currencies, attempts to rebound due to the sentiment of the Federal Reserve (Fed) maintaining higher interest rates for longer. However, the decline in the US Treasury yields could contribute to pressure on the Greenback, supporting the AUD/USD pair.

In the United States (US), the preliminary Michigan Consumer Sentiment Index for May is set to be released on Friday, with expectations for a slight decrease. This index is a survey that measures sentiment among US consumers, covering three main areas: personal finances, business conditions, and buying conditions. Additionally, Chinese Consumer Price Index (CPI) data is expected on Saturday, which could have an impact on the Australian Dollar (AUD) as Australia and China share close trading ties.



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

AUD/USD: Interim top confirmed, 0.7000 at risk

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. 

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AUD/USD Big Picture

AUD/USD Bullish Themes

AUD/USD Bearish Themes

FXS Signals

Latest Australian Dollar Analysis


Latest AUD Analysis

Editors' picks

EUR/USD nears 1.0800 on broad US Dollar weakness

EUR/USD nears 1.0800 on broad US Dollar weakness

Optimism continues to undermine demand for the American currency ahead of the weekly close. EUR/USD hovers around weekly highs just ahead of the 1.0900 figure.

EUR/USD News

GBP/USD reconquers 1.2500 with upbeat UK GDP

GBP/USD reconquers 1.2500 with upbeat UK GDP

Following BOE-inspired slump on Thursday, the British Pound changed course and trades around 1.2530. Better-than-anticipated UK GDP and a weaker USD behind the advance.

GBP/USD News

USD/JPY moves above 155.50 due to the firmer US Dollar

USD/JPY moves above 155.50 due to the firmer US Dollar

USD/JPY gained ground due to the recovery in the US Dollar on Friday. Japan’s Current Account Surplus was lower than market expectations, weakening the Japanese Yen. US Initial Jobless Claims rose to an eight-month high of 231K, surpassing estimates of 210K.

USD/JPY News

Gold resumes advance and trades above $2,370

Gold resumes advance and trades above $2,370

XAU/USD accelerated its recovery on Friday, as investors drop the USD. Dismal US employment-related figures revived hopes for a soon-to-come rate cut from the Fed.

Gold News

Oil gains ground above $79.20 amid rising demand optimism in China

Oil gains ground above $79.20 amid rising demand optimism in China

Western Texas Intermediate, the US crude oil benchmark, is trading around $79.30 on Friday. The black gold edges higher amid optimism about rising demand in China and the US, the world's two biggest crude-consuming nations. 

Oil News

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Signatures


AUD/USD YEARLY FORECAST

How could AUD/USD move this year? Our experts make an AUD/USD update forecasting the possible moves of the Aussie-US Dollar pair during the whole year. Don't miss our 2024 AUD/USD forecast!

AUD/USD FORECAST 2024

The Australian Dollar (AUD) started 2023 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. Read more details about the forecast.

MOST INFLUENTIAL POLITICAL EVENTS IN 2024 FOR AUD/USD

Will the Fed will achieve a soft landing? The current market pricing for a more aggressive policy easing by the central bank next year might have already set the stage for a disappointment and favours the USD bulls. This should allow the USD to resume the prior uptrend witnessed since July 2023 and keep a lid on a runaway rally for the AUD/USD pair.

The upcoming US Presidential election could also play a key role in influencing the USD price dynamics and driving the aussie.


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.

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.

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).