CFD Trading Rate Australian Dollar vs US Dollar (AUDUSD)

Current price movements appear to be part of a range trading phase between 0.6280 and 0.6330. In the longer run, buildup in upward momentum is slowing; a breach of 0.6265 would suggest AUD is likely to trade in a range vs US Dollar (USD) instead of recovering, UOB Group's FX analysts Quek Ser Leang and Peter Chia note. 

AUD is likely to trade in a range

24-HOUR VIEW: "Last Friday, we expected AUD to 'trade in a range between 0.6300 and 0.6350.' Instead of trading in a range, AUD fell to a low of 0.6283, rebounding to close lower by 0.41% at 0.6306. The decline lacks momentum, and the current price movements appear to be part of a range trading phase, most likely between 0.6280 and 0.6330." 

1-3 WEEKS VIEW: "Our most recent narrative was from last Thursday (06 Mar, spot at 0.6330), wherein AUD 'could recover, potentially reaching 0.6410.' Since then, AUD has not been able to make much headway on the upside. The buildup in momentum is slowing, and a breach of 0.6265 (no change in ‘strong support’ level) would suggest AUD is likely to trade in a range instead of recovering."
 

• AUD/USD edges lower to around 0.6305 in Monday’s early Asian session. 
• China’s February CPI fell into negative territory for the first time since January last year.
• US Nonfarm Payrolls rose by 151,000 in February vs. 160,000 expected.

The AUD/USD pair weakens to near 0.6305 during the early Asian session on Monday. The disappointing Chinese economic data over the weekend weighs on the China-proxy Australian Dollar (AUD). However, the concerns over a looming slowdown in the US economy might help limit the pair’s losses. 

Data released by the National Bureau of Statistics on Sunday showed that China’s Consumer Price Index (CPI) fell by 0.7% YoY in February, compared to 0.5% growth in January. This figure came in softer than the estimation of a 0.5% decline. On a monthly basis, Chinese CPI inflation came in at -0.2% in February versus January’s 0.7%, softer than -0.1% expected.

Meanwhile, the country’s Producer Price Index (PPI) declined 2.2% YoY in February, following a 2.3% fall in January. The data came in below the market consensus of -2.1%.  Deflationary pressures continue to weigh on the world’s second-largest economy, which exerts some selling pressure on the Aussie. 

On the other hand, the cautious stance from the Reserve Bank of Australia (RBA) might support the AUD against the US Dollar (USD). The RBA is cautious about lowering the benchmark interest rate further and the decision to reduce its rate in February does not mean that the central bank is committed to cutting again at coming meetings, the minutes of the RBA meeting held on February 17 and 18 showed.

The US Nonfarm Payrolls (NFP) rose by 151,000 in February, followed by the 125,000 increase (revised from 143,000) seen in January, the US Bureau of Labor Statistics (BLS) showed Friday. This figure came in weaker than the market expectation of 160,000. The weaker-than-expected job growth in the United States could undermine the Greenback and act as a tailwind for the AUD/USD.

Australian Dollar (AUD) is expected to trade in a range between 0.6300 and 0.6350 vs US Dollar (USD). In the longer run, rapid increase in momentum suggests AUD could recover, potentially reaching 0.6410, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.  

Rapid increase in momentum suggests AUD can recover

24-HOUR VIEW: "Yesterday, we expected AUD to 'continue to strengthen.' However, we held the view that it 'it does not seem to have enough momentum to reach 0.6410'. We pointed out, 'there is another resistance at 0.6370.' During the NY session, AUD rose briefly to 0.6364 before easing to close largely flat at 0.6332 (-0.05%). The brief advance did not result in any increase in momentum, and we expect range trading today, likely between 0.6300 and 0.6350." 

1-3 WEEKS VIEW: "We revised our view from negative to positive yesterday (06 Mar, spot at 0.6330). We highlighted that the strong advance from two days ago 'has resulted in a rapid increase in momentum,' and AUD 'could recover, potentially reaching 0.6410.' Our view remains unchanged. To sustain the momentum, AUD must hold above 0.6265 (‘strong support’ level was at 0.6235 yesterday)."

Australian Dollar (AUD) is expected to continue to strengthen vs US Dollar (USD), but it does seem to have enough momentum to reach 0.6410 for now. In the longer run, rapid increase in momentum suggests AUD could recover, potentially reaching 0.6410, UOB Group's FX analysts Quek Ser Leang and Peter Chia note. 

Enough momentum to reach 0.6410 for now

24-HOUR VIEW: "While we expected AUD to 'strengthen further' yesterday, we were of the view that 'any advance is likely part of a higher range of 0.6230/0.6285.' However, AUD broke decisively above 0.6285 and soared to 0.6343. Today, we continue to expect AUD strength. However, at this stage, it does not seem to have enough momentum to reach 0.6410. There is another resistance at 0.6370. On the downside, any pullback is likely to hold above 0.6270 (minor support is at 0.6300)." 

1-3 WEEKS VIEW: "After holding a negative view since late last week, we cautioned yesterday (05 Mar, spot at 0.6260) that 'momentum is slowing, and the likelihood of further declines is diminishing.' We stated, 'a breach of 0.6285 would indicate stabilisation.' We did not expect AUD to soar to 0.6343. The strong advance has resulted in a rapid increase in momentum. From here, we expect AUD to recover, potentially reaching 0.6410. To sustain the buildup in momentum, AUD must remain above 0.6235."

• AUD/USD is marginally higher even though the US Dollar has faced strong selling pressure.
• The US private sector added fewer job-seekers in February.
• The US-China trade war has exerted significant pressure on the Australian Dollar.

The AUD/USD pair is slightly higher to near 0.6280 in North American trading hours on Wednesday. The Aussie pair is trading higher while the US Dollar (USD) plunges due to multiple headwinds, such as an intensifying trade war and escalating Federal Reserve (Fed) dovish bets.

The Australian Dollar (AUD) is facing significant selling pressure amid a trade war between China and the United States (US). China has announced retaliatory tariffs on the US, resulting in an escalation in trade war between them. Earlier, US President Donald Trump had imposed an additional 10% tariff on China, along with 25% on Canada and Mexico, for pouring drugs into the US economy.

The Aussie Dollar is also the victim of the US-China trade war, knowing that the Australian economy relies heavily on exports to China. Higher tariffs on China have made Chinese products less competitive globally.

Domestically, the Reserve Bank of Australia (RBA) is unlikely to cut interest rates again soon as its battle against inflation is not over. RBA's minutes for the February policy meeting showed that it reduced the Official Cash Rate (OCR) by 25 basis points (bps) to 4.10%.

Meanwhile, soft ADP Employment data for February is expected to exert more pressure on the US Dollar. The ADP reported that private employers added 77K fresh workers, lower than estimates of 140K and the former release of 186K. Soft labor demand in the US private sector is expected to prompt Fed dovish bets, which had already increased due to weak Personal Spending data for January.

For more information about the current status of US employment, investors will focus on the Nonfarm Payrolls (NFP) data for February, which will be released on Friday.

AUD/USD is firmer on US Dollar (USD) weakness, BBH's FX analysts report.

RBA remains cautious which offers AUD support

"Australia’s Q4 real GDP matched consensus. The economy grew 0.6% q/q vs. 0.3% in Q3. Both public and private expenditure contributed to the growth, supported by an increase in exports of goods and services. On an annual basis, real GDP was up 1.3% in Q4 slightly above the RBA’s 1.1% forecast. The RBA projects growth to return to its trend rate of 2% over 2025."

"RBA remains cautious which offers AUD support. Deputy Governor Andrew Hauser reiterated overnight that 'the Board does not currently share the market’s confidence that a sequence of further cuts will be required.'"

"Interest rate futures imply almost 75bps of easing in the next 12 months with the next 25bps cut priced-in for May as heightened trade tensions weighs on the global economic outlook."

Australian Dollar (AUD) could strengthen further vs US Dollar (USD); any advance is likely part of a higher range of 0.6230/0.6285. In the longer run, momentum is slowing, and the likelihood of further declines is diminishing; a breach of 0.6285 would indicate stabilisation, UOB Group's FX analysts Quek Ser Leang and Peter Chia note. 

Likelihood of further declines is diminishing

24-HOUR VIEW: "Two days ago, we expected AUD to trade in a range. Yesterday, we indicated that 'the price action still appears to be part of a range trading phase,' and we expected AUD to 'trade between 0.6190 and 0.6250.' However, after dipping briefly to 0.6187, AUD soared, reaching a high of 0.6272. While further AUD strength seems likely today, given that momentum has not increased significantly, any advance is likely part of a higher range of 0.6230/0.6285. In other words, AUD is unlikely to break clearly above 0.6280." 

1-3 WEEKS VIEW: "We have maintained a negative AUD view since late last week. After AUD fell, in our latest narrative from Monday (03 Mar, spot at 0.6215), we highlighted that 'While declines still seem likely, AUD must break and remain below 0.6190 before a move to 0.6155 can be expected.' Yesterday, AUD dipped briefly to 0.6187 and then rebounded. Momentum is beginning to slow, and the likelihood of further declines is diminishing. However, only a breach of 0.6285 (no change in ‘strong resistance’ level from yesterday) would indicate that the weakness has stabilised."

• AUD/USD falls slightly but holds the key support of 0.6200.
• The Aussie Dollar faces pressure as US President Trump imposes additional 10% tariffs on China.
• Escalating Fed dovish bets have weighed on the US Dollar.

The AUD/USD pair is down 0.1% to near 0.6220 in European trading hours on Tuesday. The Aussie pair trades lower even though the US Dollar (USD) extends its downside, suggesting significant weakness in the Australian Dollar (AUD).

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, revisits the 11-week low of 106.15.

The Australian Dollar faces strong selling pressure as United States (US) President Donald Trump has announced additional 10% tariffs on China. Trump also slapped 10% levy on China in early February. Higher tariffs on Chinese products would diminish their competitiveness in the global market. Such a scenario could be unfavorable for the Aussie Dollar as it is the leading trading partner of China.

On the domestic front, an expected increase in Australian Retail Sales could offer some cushion to the antipodean. The Retail Sales data, a key measure of consumer spending, rose by 0.3% in January on month after declining by 0.1% in December.

Meanwhile, the US Dollar faces pressure on mounting bets that the Federal Reserve (Fed) could resume the monetary expansion cycle in the June policy meeting. The likelihood for the Fed to reduce interest rates in June has increased to 87% from 69% recorded a week ago, according to the CME FedWatch tool.

Australian Dollar (AUD) is expected to trade between 0.6190 and 0.6250 vs US Dollar (USD). In the longer run, AUD must break and remain below 0.6190 before a move to 0.6155 can be expected, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Below 0.6190, a move to 0.6155 can be expected

24-HOUR VIEW: "After AUD fell to a low 0.6192 last Friday and then rebounded, we highlighted yesterday (Monday) that 'the rebound in oversold conditions and slowing momentum indicates that AUD is unlikely to weaken further.' We expected AUD to 'trade in a 0.6195/0.6240 range.' AUD subsequently traded in a higher and wider range than expected (0.6204/0.6255), closing at 0.6225 (+0.27%). The price action still appears to be part of a range trading phase. Today, we expect AUD to trade between 0.6190 and 0.6250."

1-3 WEEKS VIEW: "Our update from yesterday (03 Mar, spot at 0.6215) still stands. As highlighted, “While declines still seem likely, AUD must break and remain below 0.6190 before a move to 0.6155 can be expected.” We will continue to hold the same view provided that AUD remains below 0.6285 (no change in ‘strong resistance’ level from yesterday). Note that below 0.6190, there is another major support at 0.6155."

• The Aussie rebounded by roughly 0.67%, lifting the pair toward 0.6245 but still under last week’s negative outlook.
• Federal Reserve (Fed) dovish bets firm up after softer United States Personal Spending data.
• President Donald Trump reiterates he will double China tariffs to 20%.
• Tariff stalemate extends to Mexico and Canada, with no room left for negotiation according to Trump.

AUD/USD gains sharply to near 0.6230 as the US Dollar (USD) faces strong selling pressure. Fed dovish bets have escalated following a decline in United States (US) Personal Spending for January. However, the Australian Dollar (AUD) could again face selling pressure if President Donald Trump proceeds with additional tariffs on key trading partners, including China, Mexico, and Canada.

Daily digest market movers: Traders eye Trump’s new tariff pledges and RBA policy signals

• President Trump announced an intention to lift tariffs on Chinese imports to 20%, up from the currently planned 10%. He also said there is “no room left for a deal” on duties affecting Mexico and Canada, intensifying trade uncertainty across currency markets.
• Regarding the Fed policy, the probability of a Fed rate cut at June’s meeting has risen to 74%, according to the CME FedWatch tool, triggered by a downbeat US Personal Spending report. Markets interpret the data as a sign that the Fed may soften its policy stance sooner.
• On the local front, the Reserve Bank of Australia (RBA) cut its Official Cash Rate by 25 basis points to 4.10% in February and signaled a measured approach going forward. Investors await the RBA minutes due on Tuesday for hints of further easing measures as inflation remains a priority.
• While the US Dollar has weakened amid Fed cut speculation, President Trump’s decision to double China tariffs stirs caution. The Aussie, sensitive to Chinese demand, could rapidly drop if Beijing retaliates or if other trading partners see increased barriers.
• On Monday, Trump clarified he has “not talked about suspending military aid to Ukraine,” yet tensions emerged after Ukrainian officials rejected a prior “rare earth deal.”
• Meanwhile, the People’s Bank of China’s (PBOC) supportive stance might buffer some risk for China, but any slowdown there still undermines Australia’s commodity-driven economy.

AUD/USD technical outlook: Pair halts losing streak but remains vulnerable below key barriers

The AUD/USD pair rose by about 0.67% to the mid-0.6200 region, temporarily reversing its downward momentum from last week. While the Aussie stopped the bleeding on account of a softer US Dollar, the outlook stays bearish after multiple sessions of losses. The Relative Strength Index (RSI) currently sits in a lower band, although it is rising sharply and suggests some buyer interest returning. Meanwhile, the Moving Average Convergence Divergence (MACD) histogram shows red bars, indicating lackluster upside strength. Key resistance stands near the 0.6300–0.6330 handle, with further hurdles around recent swing highs. A renewed tariff threat or weaker Chinese demand could easily cap gains and trigger a retest of last week’s lows.

• AUD/USD gains sharply to near 0.6230 as the US Dollar faces strong selling pressure.
• Fed dovish bets have escalated as US Personal Spending declined in January.
• The Australian Dollar would face selling pressure if Trump imposed additional 10% tariffs on China.

The AUD/USD pair climbs to near 0.6230 in North American trading hours on Monday. The Aussie pair gains as the US Dollar (USD) faces strong selling pressure after comments from United States (US) Commerce Secretary Howard Lutnick indicated that tariffs by President Donald Trump on Canada and Mexico could be lower than 25% as stated earlier.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, tumbles to near 106.80.

Over the weekend, Howard Lutnick said to Fox News that there are going to be “tariffs on Mexico and Canada on Tuesday” but we are going to leave that for the “President and his team to negotiate”.

Additionally, escalating Federal Reserve (Fed) dovish bets have also weighed on the US Dollar. The probability for the Fed to cut interest rates in the June policy meeting has increased to 74% from 63% a week ago, according to the CME FedWatch tool. Fed dovish bets have swelled due to a decline in the US Personal Spending data for January.

Meanwhile, the upside in the Aussie pair remains capped as Donald Trump is poised to impose additional 10% tariffs on China, alongwith his North American peers. The impact of Trump’s tariffs is also unfavorable for the Australian Dollar (AUD) knowing that Australian exports rely heavily on the Chinese economy.

Going forward, investors will focus on the Reserve Bank of Australia (RBA) minutes for the February meeting, which will be released on Tuesday. In February, the RBA reduced its Official Cash Rate (OCR) by 25 basis points (bps) to 4.10%. This was the first interest rate cut decision by the RBA since November 2020. RBA Governor Michele Bullock guided a cautious stance on further policy-easing as the battle against inflation is not over yet.

Australian Dollar (AUD) is expected to trade in a 0.6195/0.6240 range. In the longer run, AUD must break and remain below 0.6190 before a move to 0.6155 can be expected, UOB Group's FX analysts Quek Ser Leang and Peter Chia note. 

Below 0.6190, a move to 0.6155 can be expected

24-HOUR VIEW: "Following AUD sharp drop last Thursday, we highlighted on Friday that AUD 'could continue to decline, but the major support at 0.6190 could be just out of reach.' Our view turned out to be correct, as AUD dropped to 0.6192 before rebounding. The rebound in oversold conditions and slowing momentum, indicates that AUD is unlikely to weaken further. Today, we expect AUD to trade in a 0.6195/0.6240 range." 

1-3 WEEKS VIEW: "When AUD was at 0.6310 last Thursday, 27 Feb, we highlighted it 'could edge lower, but it must break clearly below 0.6280 before a move to 0.6255 can be expected.' AUD then dropped sharply, and on Friday (28 Feb, spot at 0.6235), we stated, 'further declines seem likely, and the level to monitor is 0.6190.' AUD then dropped to a low of 0.6192. While declines still seem likely, AUD must break and remain below 0.6190 before a move to 0.6155 can be expected. The likelihood of AUD breaking clearly below 0.6190 will remain intact provided that the ‘strong resistance’ at 0.6285 (level was at 0.6305 last Friday) remains intact."

• AUD/USD rebounds to around 0.6215 in Monday’s early Asian session. 
• China's NBS came in stronger than expected in February. 
• Trump said he will impose an additional 10% tariff on China. 

The AUD/USD pair recovers some lost ground to near 0.6215, snapping the six-day losing streak during the early Asian session on Monday. The upbeat Chinese economic data provides some support to the pair. Later on Monday, China’s February Caixin Manufacturing Purchasing Managers Index (PMI) will be in the spotlight. 

China's PMI returned to positive territory in February as the country ramped up measures to boost its economy. Data released by the China Federation of Logistics and Purchasing (CFLP) on Saturday showed that the country’s NBS Manufacturing PMI improved to 50.2 in February versus 49.1 prior. This figure came in stronger than the 49.9 expected. Meanwhile, the NBS Non-Manufacturing PMI climbed to 50.4 in February from 50.2 in January, beating the estimation of 50.3.

The encouraging Chinese PMI report has lifted the China-proxy Australian dollar (AUD) as China is a major trading partner to Australia. However, tariffs imposed by the United States threaten to overshadow the manufacturing recovery and might cap the AUD’s upside. 

US President Donald Trump has said that an additional 10% tariff will be placed on Chinese imports starting Tuesday, compounding the initial 10% rate that took effect last month. Escalating trade tensions between the US and China could boost the safe-haven flows and benefit the US Dollar (USD) in the near term.

• The Aussie extends its losing streak by about 0.54%, slipping near 0.6200 and approaching multi-week lows.
• A six-day decline sees the pair break below the 20-day Simple Moving Average, reinforcing short-term seller strength.
• Traders assess fresh tariff escalations, with President Trump threatening an extra 10% levy on Chinese imports.
• PCE data from the US from January met expectations.

The AUD/USD pair posts a fresh three-week low near 0.6200 in Friday’s trading session after extending its losing streak for the sixth straight day. The Aussie was already under downward pressure throughout the week but faced an extra blow following United States (US) President Donald Trump’s proposal of additional 10% tariffs on China on Thursday. Inflation data from the US also took center stage with the Personal Consumption Expenditures (PCE) data from January meeting expectations as well as Trump’s meeting with the Ukrainian president.

Daily digest market movers: Risk aversion grips Aussie amid trade tension and weak domestic indicators

• President Trump’s new 10% tariff threat on Chinese goods compounds existing duties, fueling fears of further retaliation. Tariffs for Mexico and Canadian goods are set to take place as soon as next week.
• Australian Private Capital Expenditure data unexpectedly shrank by 0.2% quarter-on-quarter in Q4 2024, missing a 0.8% forecast, highlighting weaker investment activity and undermining confidence in the Australian economy.
• Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser reiterates optimism for inflation improvements but stresses caution amid persistently tight labor-market conditions and uncertain price trends.
• Across the Pacific, the US Core Personal Consumption Expenditures Price Index, considered the Federal Reserve’s (Fed) key inflation measure, rose by 0.3% in January (month-over-month), matching expectations, as Fed policymakers weigh the implications of ongoing trade disputes.
• Ukrainian President Volodymyr Zelenskyy rejected President Trump’s “rare earth deal,” triggering an irate response from Trump and Vice President JD Vance, according to White House sources.
• The scuttled agreement intended to swap defense guarantees for mineral access was deemed ambiguous and insufficient to deter Russia’s invasion. Zelenskyy cited a more favorable proposal from the European Union, further dampening sentiment around the White House.

AUD/USD technical outlook: Sellers push below 20-day SMA as RSI heads toward negative zone

The AUD/USD pair fell by around 0.54% to trade near 0.6200 on Friday, extending a six-day losing streak and losing support from its 20-day Simple Moving Average. The Relative Strength Index (RSI) hovers in the lower part of the scale, suggesting waning bullish momentum, while the Moving Average Convergence Divergence (MACD) histogram shows decreasing green bars, reflecting diminishing upside pressure. Immediate support could emerge around the 0.6150 zone, whereas a bounce would likely face resistance near the 20-day SMA if risk sentiment improves or tariff anxieties recede.

Australian Dollar (AUD) could continue to decline vs US Dollar (USD), but the major support at 0.6190 could be just out of reach. In the longer run, further AUD declines seem likely; the level to monitor is 0.6190, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Further AUD declines seem likely

24-HOUR VIEW: "While we pointed out yesterday that 'the risk for AUD is on the downside,' we were of the view that 'any decline may not break the major support at 0.6280.' AUD then dropped but held above 0.6280 until the NY session when it plunged to 0.6232. Today, AUD could continue to decline, but the major support at 0.6190 could be just out of reach. Resistance levels are at 0.6255 and 0.6275."

1-3 WEEKS VIEW: "Yesterday, 27 Feb, when AUD was at 0.6310, we highlighted that it 'could edge lower, but it must break clearly below 0.6280 before a move to 0.6255 can be expected.' We also highlighted that 'the likelihood of AUD breaking clearly below 0.6280 will remain intact provided that the ‘strong resistance’ level at 0.6375 is not breached.' We did not expect the subsequent sharp drop that sent AUD to a low of 0.6232. Further declines seem likely, and the level to monitor is 0.6190. On the upside, the ‘strong resistance’ level has moved lower to 0.6305 from 0.6375."

• AUD/USD refreshes three-week low near 0.6200 as US President Trump threatens to impose additional 10% tariffs on China.
• RBA Hauser supports keeping interest rates steady until he sees more progress in the disinflation trend toward the 2% target.
• Investors await the US PCE inflation as it will influence the Fed’s monetary policy outlook.

The AUD/USD pair posts a fresh three-week low near 0.6200 in European trading session after extending its losing streak for the sixth trading day on Friday. The Aussie pair was already facing pressure the entire week but sensed more pressure after United States (US) President Donald Trump threatened to impose additional 10% tariffs on China on Thursday.

US President Trump said in a tweet from his Truth.Social account that he will slap an additional 10% levy on China due to continuous flows of drugs into the economy through the borders of Canada and Mexico. Trump also confirmed that the 25% tariffs proposed for Canada and Mexico are coming into effect on March 4.

Additional import duties from the US are expected to further weigh on Chinese economic growth. Donald Trump also imposed 10% tariffs on China earlier this month. The Australian economy relies heavily on exports to China, and higher import duties by the US on the world’s second-largest economy make its products less competitive. Therefore, Trump’s tariffs have indirectly impacted the Australian Dollar (AUD), which is vulnerable to policies that weigh on demand for Chinese products.

On the monetary policy front, the Reserve Bank of Australia (RBA) is unlikely to cut interest rates again soon. RBA Deputy Governor Andrew Hauser said on Thursday that he wants to see more “positive inflation data” before considering further rate cuts.

On the US Dollar (USD) front, investors await the United States (US) Personal Consumption Expenditure Price Index (PCE) data for January, which will be published at 13:30 GMT. Investors will pay close attention to the core PCE inflation data as it is the Federal Reserve’s (Fed) preferred inflation gauge. The inflation data will influence market expectations for the Fed’s monetary policy outlook.

Risk for Australian Dollar (AUD) is on the downside vs US Dollar (USD), but any decline may not break the major support at 0.6280. In the longer run, AUD could edge lower, but it must break clearly below 0.6280 before a move to 0.6255 can be expected, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

AUD has a chance to edge lower

24-HOUR VIEW: "We did not expect AUD to drop to a low of 0.6296 yesterday (we were expecting range trading). Although the increase in downward momentum indicates downside risk today, any decline may break the major support at 0.6280. To sustain the momentum, AUD must not break above 0.6350 (minor resistance is at 0.6330)."

1-3 WEEKS VIEW: "Two days ago (25 Feb, spot at 0.6345), we revised our AUD view from positive to negative, indicating that the recent 'upward momentum has largely faded,' and AUD 'is likely to consolidate to between 0.6280 and 0.6410.' Yesterday, AUD fell to 0.6296, closing lower by 0.60% at 0.6305. There has been a tentative buildup in downward momentum, and AUD is likely to edge lower. However, it must break and hold below 0.6280 before a move to 0.6255 can be expected. The likelihood of AUD breaking clearly below 0.6280 will remain intact provided that the ‘strong resistance’ level at 0.6375 is not breached."

• Australian Dollar declines as subdued inflation dims hopes for aggressive rate cuts, pressuring the Aussie’s recent rally.
• US House of Representatives passes Trump’s tax cut bill, elevating the Greenback despite uncertain tariff developments.
• Softer growth in Australia’s Consumer Price Index intensifies speculation around potential monetary policy actions by the RBA.
• Donald Trump confirmed that tariffs on Mexico and Canada will take effect in April.

AUD/USD falls to near 0.6300 as the US Dollar (USD) extends its recovery. The United States (US) House of Representatives passed President Donald Trump’s tax cut bill, boosting the Greenback. Meanwhile, slower-than-expected inflation growth in Australia adds to the Aussie’s woes, following last week’s 25 basis points rate cut by the Reserve Bank of Australia (RBA).

Daily digest market movers: Aussie battles inflation slowdown and tariffs

• Market participants note subdued growth in the Australian Monthly Consumer Price Index at 2.5% year-on-year, softer than the 2.6% forecast, maintaining concerns about the RBA’s inflation outlook.
• The RBA recently lowered its Official Cash Rate to 4.10%, reiterating that controlling inflation is far from complete, and future actions will rely on persistent price and wage signals.
• Softer monthly CPI data fosters uncertainty over Australia’s economic resilience, while US President Donald Trump’s revived tariff threats keep investors alert to potential disruptions.
• Trump reiterated plans to impose a 25% levy on imports from Canada and Mexico but pushed them to April.
• Investor attention also turns to US Personal Consumption Expenditure Price Index data, a key inflation measure used by the Federal Reserve for guiding interest rate decisions.

AUD/USD technical outlook: RSI near midpoint, momentum falters as pair nears 20-day SMA

AUD/USD sees moderate losses on Wednesday, with the Aussie near 0.6315 after a four-day losing streak. The Relative Strength Index (RSI) hovers in a neutral region but is declining sharply, suggesting a weakening bullish momentum. Meanwhile, the Moving Average Convergence Divergence (MACD) histogram prints decreasing green bars, indicating a loss of upside traction.

Although the pair remains above the 20-day Simple Moving Average, failure to reclaim the 100-day SMA does not imply a major structural shift, and the Aussie may continue to trade within these moving average boundaries unless new data sparks a more decisive move.

• AUD/USD falls sharply to near 0.6300 as the US Dollar extends its recovery.
• The US Dollar strengthens as the US House of Representatives passes Trump’s tax cut bill.
• Slower-than-expected growth in Aussie inflation weighs on the Australian Dollar.

The AUD/USD pair falls significantly to near the round-level support of 0.6300 in the North American session on Wednesday. The Aussie pair is down almost 0.6% as the US Dollar (USD) recovers further as the Republicans-controlled-United States (US) House of Representatives passed President Donald Trump’s tax cut bill on Tuesday.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, extends its recovery to near 106.60. The USD Index rebounds in the Asian session after discovering buying interest near the 11-week low of around 106.10.

Investors expect President Trump’s $4.5 trillion tax cut bill to be pro-growth and inflationary for the economy. This scenario would force Federal Reserve (Fed) officials to maintain a restrictive monetary policy stance for longer.

To get cues about the current status of inflation, investors will focus on the US Personal Consumption Expenditure Price Index (PCE) data for January, which will be released on Friday. The underlying inflation data, which is the Fed’s preferred inflation gauge, is expected to influence market speculation about the Fed’s monetary policy outlook. According to the CME FedWatch tool, the Fed is expected to keep interest rates steady in the range of 4.25%-4.50%.

Meanwhile, the Australian Dollar (AUD) underperforms its peers on softer-than-expected growth in the Australian Monthly Consumer Price Index (CPI) data for January. Australian CPI rose by 2.5% year-on-year, slower than estimates of 2.6% but at a steady pace seen in December.

Last week, the Reserve Bank of Australia (RBA) stated that the battle against inflation is far from over after reducing interest rates by 25 basis points (bps) to 4.1%.

Going forward, Trump’s tariff fears would keep the Aussie Dollar on its toes. Till now, Trump has imposed 10% tariffs on imports from China and has threatened a 100% levy on BRICS if they attempt to replace the US Dollar.